As it was forecasted on Monday, the common European currency is depreciating against the US Dollar, as weak support levels are easily passed. Various clues indicate that the EUR/USD currency exchange rate will decline until it reaches the 1.1050 mark. That would occur in the case of no new market information, which could strengthen the Euro in the wake of Mario Draghi's recent comments on monetary policy.
The US economy expanded at a stronger-than-initially expected pace in the March quarter; however, an economic slowdown remained on the table in the second quarter. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualized pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months.
Loads of minor data releases
EUR/USD consistent with forecast
As it was expected the common European currency retreated down to the weekly S1 at the 1.1141 level against the US Dollar. However, it can be observed that the pair is already heading even lower, as the weekly S1's attracting force has been already left behind. The next support, which will hinder the decline of the common European currency against the Greenback, will be the weekly S2 at 1.1097. Moreover, it is possible that during the week the pair will decline as low as 1.1050 mark, where nearby a strong support cluster is located at.
Daily chart
Hourly chart
Read More: Technical AnalysisTraders optimistic towards the US Dollar
SWFX traders remain bearish, as 61% of open positions are short. However, only 52% of trader set up orders are to sell the Euro.
OANDA traders remain largely bearish, as 71.43% of open positions are short on Tuesday compared to 67.09% previously. In addition, SAXO bank clients are likewise bearish, as 62.99% of open positions are short, compared to 63.52% on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.11 in late August
Traders, who were questioned on their longer-term views on EUR/USD between April 30 and today expect, on average, that the currency pair may trade slightly above 1.11 in late August. In general, 52% (-2%) of participants believe the exchange rate will be above 1.10 in the following ninety days, and 43% (-1%) see it above 1.12.