- Commands to buy the euro versus the dollar in 100-pip range from spot are staying strongly negative (29% bullish / 71% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1332
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1114
- Upcoming events on January 30: Germany Retail Sales (Dec), France Consumer Spending (Dec), Spain GDP (Q4), Italy Unemployment Rate (Dec), Eurozone CPI (Jan), US GDP (Q4)
© Dukascopy Bank SA
German consumer climate reached a new high of 9.3 points, a level unseen for 13 years. The consumer climate improved, with economic, income and willingness to buy rising. Slumping energy prices over the last few weeks had a significant impact on German consumers. Due to lower energy prices disposable income gained ground, giving consumers freedom to spend their capital elsewhere. Another reason for higher consumer confidence is a new uptrend movement in the country's economy, with GDP and overall economic growth rising.
Europe's biggest economy is expected to keep rebounding in the upcoming months, given continuously falling energy prices and cheapening Euro, thus boosting exports and companies' willingness to invest. At the same time the income expectation also edged up in Germany this month, overshadowing the slight drop back in December.
Watch More: Dukascopy TV
Spain and US to publish preliminary GDP numbers on Friday
Friday is expected to be a crucial day in terms of importance of fundamental statistics that is going to be released on that day. Spain, the fourth-biggest economy of the Eurozone, and the Unites States are announcing GDP data for the last quarter of 2014 tomorrow. Taking into account positive estimates for both countries, the potential impact on EUR/USD is unknown, meaning that main drivers for the cross will come from details of growth or any surprises.Read More: Fundamental Analysis
EUR/USD's drop to continue in the long-term
The long-term outlook for the EUR/USD currency pair is remaining bearish both in short and long-term. The ECB has made a long-awaited decision to expand asset purchases back on Jan 22, which will continue pushing the Euro to the downside. Moreover, the lowest point since the year 2003 around 1.1113 has already been hit by EUR/USD cross. Taking into account present monetary conditions and bearish outlook for the Euro, the pair has a chance to go below 1.10 towards the end of the first quarter of this year. Short-term bullish actions are still possible, but their impact and size are not expected to be appropriate for the common currency to commence a stable recovery. Moreover, some market participants suggest it may fall further and even trade towards the parity in course of this year.Daily chart
© Dukascopy Bank SA
Following two days of gains, EUR/USD pair decided to resume losing value and plunged considerably on Wednesday. All in all, the cross dropped 94 pips during the trading session, thus crossing a support represented by the weekly pivot point at 1.1332. At the moment there is no major background for the Euro to advance. It proclaims that the current down-trend is likely to extend at least down to this year's low at 1.1115 in the near term.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Opened positions on EUR/USD remain broadly neutral
At the same time, commands to acquire the Euro in 100-pip range dropped again to reach just 29% this morning. As a result, it means that, in case the pair increases in price, in the medium-term bearish pressure may stop the pair from climbing further around the monthly S3 at 1.1466.
On the other hand, if the euro declines, total losses may potentially extend down to the weekly S1 at 1.0984 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community waiting for the Euro to stabilise this week
© Dukascopy Bank SA
Read More: Community Forecasts
aslamhammad, one of the community members participating in the survey, motivates his slightly positive outlook towards the common currency by saying that the EUR/USD "selling pressure is decreasing as QE programme was largely expected". He also supposed that the 1.10 level offers a good support for the Euro and the pair "may struggle to break it this week".
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Dec 29 and Jan 29 expect, on average, to see the currency pair around 1.15 by the end of April. Though the majority of participants, namely 54% of them, believe the exchange rate will drop down even below 1.14 in ninety days, with 27% alone seeing it below 1.10. Alongside, 24% of those surveyed reckon the price will trade in the range between 1.16 and 1.22 by the end of April of this year.
© Dukascopy Bank SA