- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bullish (60% long / 40% short)
- The closest resistance for this pair is located at 1.1406
- At the same time, the closest support is currently placed at 1.1360
- Upcoming events on June 19: Germany PPI (May), ECOFIN Meeting
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The Euro zone inflation returned firmly to green territory in May, as the ECB's quantitative easing programme has started to produce desired results. Euro area's annual inflation came in at 0.3% in May 2015, up from 0.0% in the preceding month, according to Eurostat. On a monthly basis, prices in the bloc climbed 0.2%, after flat growth seen in April. Market participants had predicted a 0.2% growth rate in prices.
Energy prices increased 1.0% over the month in May, services climbed 1.3%, followed by food, alcohol and tobacco at 1.2%, while non-energy industrial goods rose 0.3%, according to Eurostat. Meanwhile, core inflation, a measure that excludes volatile components such as food and energy, added 0.9 % in May, compared to the 0.6% seen a month before and the 0.9% estimated in the preliminary reading.
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Friday to bring main news outside Europe or US
Fundamental indicators, which are going to have substantial influence on the market tomorrow, are going to be published outside the EU or US. Among the only influencing factors for the EUR/USD cross, German producer price index is awaited due at 6:00 AM GMT. In the meantime, the Economic and Financial Affairs Council of the EU will meet in Luxembourg tomorrow. The agenda includes discussions on the Investment plan for Europe, banking union legislation and taxation of interest and royalty payments.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 managed to erase one of the strongest resistances on its way to the north. The pair eliminated the long-term downtrend line around 1.1340 and continued to move upwards, therefore violating the next supply 20 pips from above (monthly R1). In case the Euro consolidates above them and, especially, beyond the Jun 10 high at 1.1383, then the medium-term outlook will be changed to positive. Moreover, daily technical studies are pointing to the upside at the moment.
Hourly chart
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EUR/USD sentiment flat for ninth day
Meanwhile, pending orders to buy or sell the Euro against the US Dollar in 100-pip range from the spot price surged yesterday, following an increase in the value of the EUR/USD currency pair. The total share of buy commands gained 20% to reach 60%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be prolonged as high as the May 2015 high at 1.1467. On the other hand, a downward development of the Euro is likely to be limited by the long-term downtrend, currently at 1.1325.
Spreads (avg,pip) / Trading volume / Volatility
Community suggests the Euro will show mixed performance against the US Dollar this week
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STARLINE, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "Despite the positive data from the US, the Euro is trying to maintain the bullish trend, still testing the support line at 1.1200. If you resist the decline in the short term we could see an attempt to test the resistance at 1.1470."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 18 and Jun 18 expect, on average, to see the currency pair around 1.10 by the end of September. Though the majority of participants, namely 62% of them, believe the exchange rate will trade below this mark this level in ninety days, with 30% alone seeing it below 1.06. Alongside, only 16% 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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