- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bearish (45% long / 55% short)
- The closest resistance for this pair is located at 1.1360
- At the same time, the closest support is currently placed at 1.1162
- Upcoming events on June 12: Euro zone Industrial Production (Apr), US PPI (May) and Reuters/Michigan Consumer Sentiment Index (Jun)
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Italy's industrial output unexpectedly declined in April, suggesting that economic growth in the Euro zone's third-biggest economy remains fragile since exiting its worst post-war recession. Industrial output slipped 0.3% on the month in seasonally-adjusted terms, according to Istat. The decrease was led by a 1.3% drop in energy and a 1.2% decrease in consumer goods. Measured on an annual basis, Italian industrial production rose 0.1% in April.
Meanwhile, industrial production of the Euro zone's second biggest economy—France, also declined in the reported month. Industrial output in the Euro zone's second largest economy fell 0.9% in April from March. Industrial production declined as auto sector output fell 3.3% and coking and refining output slumped nearly 11% in April from March, Insee said.
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US PPI, consumer confidence expected to improve
There are two important data releases on Friday, to which market participants are going to pay the most of attention, and both of them are going to be published in the US. At 12:30 PM GMT the producer price index is due, while by 14:00 PM GMT the University of Michigan/Reuters consumer sentiment indicator is likely to reveal the rising consumer morale in June, up from 90.7 to 91.3 points.Read More: Fundamental Analysis
EUR/USD likely to lose value, trading range to narrow down
Judging from EUR/USD's developments that took place since May of the previous year, the pair is clearly trading downwards on a long-term chart. At the same time, it seems that now the pair is being bounded between the 2014 low and long-term downtrend line, meaning that it is currently hovering inside the descending triangle pattern. Moreover, this pattern implies a narrowing trading range, while the break-out point can be reached by the end of August. In the medium-term the common European currency may surge up to the 1.1330 mark where long-term downtrend is able to push the cross back in the direction of 1.05-1.10 area. However, the pair can also assume a possibility of growing as high as 200-day SMA around five figures above the downtrend, before finally making a decision to commence a bearish correction.Daily chart
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EUR/USD traded slightly to the upside on Wednesday, while hovering around the major downtrend around 1.13. The pair has even attempted to penetrate the supply zone at 1.1360 for a second time in five trading days. However, all efforts were unsuccessful, and the Euro returned down to 1.1320 by the end of trading. The near-term downside risks remains in place, unless the Euro commences a confident recovery above the mentioned resistance area.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are unchanged
Meanwhile, pending orders to buy or sell the Euro against the US Dollar in 100-pip range from the spot price are also fully unchanged on a daily basis, while bulls are in the minority with 45% of all commands.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the monthly R1 at 1.1360. On the other hand, a downward development of the Euro is likely to be extended down to the weekly pivot point at 1.1126.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to trade sideways against the US Dollar this week
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Read More: Community Forecasts
aslamhammad, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "EUR/USD will continue its decrease, since in the daily chart price is moving lower with better than expected US non-farm payrolls data."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 11 and June 11 expect, on average, to see the currency pair just above 1.10 by the end of September. Though the majority of participants, namely 56% of them, believe the exchange rate will trade below this level in ninety days, with 25% alone seeing it below 1.06. Alongside, 19% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of September of this year.
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