- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bullish (51% long / 49% short)
- The closest resistance for this pair is located at 1.1003
- At the same time, the closest support is currently placed at 1.0920
- Upcoming events on May 26: US Durable Goods Orders (Apr), New Home Sales (Apr) and CB Consumer Confidence (May)
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Europe's largest economy, Germany, grew by a quarterly rate 0.3% in the three months through March, down from 0.7% growth in the fourth quarter. Domestic demand supported Germany's economy in the first quarter, as both private consumption and investment spending rose. Household consumption was up 0.6% as consumers felt upbeat due to an improving labour market, rising wages and lower energy prices, while government consumption also climbed by 0.7%.
Meanwhile, German economy captains remained optimistic in May, as Ifo Business Climate index fell less than expected. The headline measure of the mood in German business circles slid to 108.5 in May, slightly below the 108.6 recorded in April, whereas analysts had expected a decline to 108.3. Meanwhile, the Current Assessment sub-index, measuring current conditions in the Euro zone's number one economy, came in at 114.3 points, following the previous month's figure of 113.9.
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US core durable goods orders to advance in April
Tomorrow, the durable goods orders from United States will be published at 12:30 PM GMT, as they are expected to increase by 0.5% in April on the core basis (excluding transportation items), while falling down by 0.2% for the headline reading. Alongside, the new home sales are also forecasted to jump in April and reach 510,000 annualised.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 1.1450 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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The single European currency dropped considerably on Friday, following a short-term rebound back on Thursday. All in all, EUR/USD traded between 1.12 and 1.10, while closing the trading session at the lower bound of this 200-pip range. The 1.10 mark is also represented by the monthly pivot point, which capped the overall sell-off of the pair. In case the Euro consolidates below this line on Monday, the attention will refocus on the next major support at 1.0860 (weekly S1; Bollinger band).
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment is bearish, bullish orders surge by 14%
Meanwhile, the commands to buy the Euro against the US Dollar in 100-pip range from the current market price gained 14% to reach 51% in the morning on Monday, as market participants took profit from short positions last Friday.
It proclaims that in case the EUR/USD rises in value, the pair's potential rebound is likely to be extended up to the 100-day SMA, currently at 1.1136. On the other hand, a downward development of the Euro should be limited by the 55-day SMA, currently at 1.0920.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to stay unchanged this week
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Read More: Community Forecasts
rokasltu, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that EUR/USD is currently trading in the upper part of 1.10-1.15 range and he thinks that "the pair will try to break even further up but will face strong resistance." On the contrary, Ilolor suggests that "after the Euro strengthened against the Dollar on the back of under performing retail sales, the rally will probably slow down in the beginning of the coming week."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 25 and May 25 expect, on average, to see the currency pair around 1.12 by the end of August. Though the majority of participants, namely 49% of them, believe the exchange rate will trade below this level in ninety days, with 33% alone seeing it below 1.08. Alongside, 27% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of August of this year.
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