- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (35% bullish / 65% bearish)
- The closest resistance for this pair is located at 1.1068
- At the same time, the closest support is currently placed at 1.0942
- Upcoming events on March 27: US Final GDP (Q4) and Reuters/Michigan Consumer Sentiment Index (Mar), Fed's Yellen Speech
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Economic recovery in the Euro zone seems to be gaining more growth momentum. This is clearly proved by improving indicators, such as yesterday's PMI and today's Ifo Business Climate Index for Germany. Taking into account data for the latter one, which was released on Wednesday, it showed a significant climb in sentiment of businesses in the Euro area's largest economy. The Ifo Index jumped to 107.9 points this month, up from 106.8 points in February.
In addition to that, French business climate advanced to its highest level since April 2012, raising hopes that the second-biggest economy of the monetary union is finally emerging from long-lasting stagnation. The benchmark business morale index increased two percentage points to 96 last month.
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US growth expected to be revised slightly upwards
On March 27, news from the United States will contribute the largest part to the potential volatility of EUR/USD currency pair. While the Euro zone is not assumed to publish any important fundamental statistics, the US has a different situation. The world's biggest economy is preparing to revise upwards its GDP growth for the last quarter of 2014, up from 2.2% to 2.4% on the annual basis. Meanwhile, consumer sentiment index from the University of Michigan will probably reveal some weakening in consumers' morale in March.Read More: Fundamental Analysis
EUR/USD likely to lose value with growing trading range
Judging from EUR/USD's developments that took place since July of the previous year, the pair is clearly trading downwards with a significant negative slope. At the same time, mid-March movements of the Euro have also confirmed a widening trading range of this currency pair, meaning it is currently hovering inside the broadening falling wedge pattern. By the end of April, the common European currency is expected to surge up to the 1.17 mark where 2005 low and 38.2% Fibonacci retracement will most probably push the cross back in the direction of 1-1.05 area. In the meantime, the Euro may hit 1:1 against the US Dollar as soon as by the end of July 2015. However, a presence of dense zone of technical levels may also considerably influence the time-frame for this important event.Daily chart
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EUR/USD decided to go further and trade upwards during yesterday's trading session. The pair has finally overcome a difficult resistance at 1.0942 (monthly S2) and neared the round level of 1.10. However, it is likely that bulls will soon be stopped and the Euro may resume falling, as soon as EUR/USD touches the 1.1070 mark. This area is strengthened not only by monthly S1 and weekly R1, but also by a medium-term downward trend line of December-March bearish move.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are negative
Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot are accounting for 35% in the morning today, no change during past 24 hours. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the long-term downtrend around 1.1050. On the other hand, a potential downward development of the Euro is considered to be extended down to the 2003 low at 1.0773.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to trade sideways this week
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Read More: Community Forecasts
independenceday32, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that after the pair returned back above the 1.05 mark "chances that the pair remains in range between 1.05 and 1.10 are high." On the other hand, aslamhammad is currently bearish on the pair. He says that "My sentiment is bearish for the EUR/USD. Taking into account that USD/CAD is currently trading near yearly highs, with low crude oil commodity prices. Therefore, I am expecting deflation in Europe."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 26 and Mar 26 expect, on average, to see the currency pair around 1.08 by the end of June. Though the majority of participants, namely 51% of them, believe the exchange rate will drop down even below this mark in ninety days, with 37% alone seeing it below 1.04. Alongside, 30% of those surveyed reckon the price will trade in the range between 1.08 and 1.14 by the end of June of this year.
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