- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (36% bullish / 64% bearish)
- The closest resistance for this pair is located at 1.0759
- At the same time, the closest support is currently placed at 1.0724
- Upcoming events on April 22: US Existing Home Sales (Mar), Euro zone Consumer Confidence (Apr)
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Factory prices in the Euro zone's number one economy rose modestly in March from February, but dropped for the 20th consecutive month, when measured on an annual basis. The PPI is considered as a proxy of consumer price inflation, as manufacturers pass on their cost increases or savings to their ultimate customers. The headline annual Producer Price Index slid 1.7% in March in a sign the European Central Bank's aggressive asset purchases have not yet inspired confidence in German manufacturers to raise wholesale prices.
Energy prices continued to influence producer prices in March. They remained unchanged from the previous month, but declined 4.7% from March 2014. Excluding energy prices, which can be volatile, producer prices rose 0.1% on the month and decreased 0.5% on the year in March.
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US news to dominate in headlines on Wednesday
In contrast to Tuesday, tomorrow the majority of statistical news will be published in the United States, while the Euro area is unlikely to be influential on foreign exchange markets on Wednesday. The US national Association of Realtors will release data on existing home sales in March as they are estimated to grow up to 5.05 million on the annual basis.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 June, the common European currency may surge up to the 1.13 mark where 100-day SMA and 23.6% 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 September-October. 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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Provided with considerable downside pressure, EUR/USD declined noticeably on Monday. The pair pierced through 2003 low and 20-day SMA to drop as low as 1.0720 by the end of the day. Now the Euro is supported by weekly PP, but stability above this level seems to be fragile, and the pair may resume declining soon. The main bearish bias remains in place, and the risk of testing 1.06 (weekly S1) in not off the table. In case this line is breached, the target will move towards Bollinger band, currently at 1.0542.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment remains above 50%, pending orders stay negative
On the other hand, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot retreated six percentage points from yesterday to hit just 36%. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the monthly PP at 1.0811. On the other hand, a downward development of the Euro is assumed to be extended down to weekly S1 at 1.06.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Mar 21 and Apr 21 expect, on average, to see the currency pair at 1.07 by the end of July. Though the majority of participants, namely 52% of them, believe the exchange rate will drop even below 1.06 in ninety days, with 27% alone seeing it below 1.02. Alongside, 21% of those surveyed reckon the price will trade in the range between 1.06 and 1.12 by the end of July of this year.
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