- Commands to buy the Euro versus the US Dollar in 100-pip range returned to negative distribution (36% bullish / 64% bearish)
- At the moment, the closest resistance for the pair is located at 1.1366
- In case of development to the south, the closest support is currently placed at 1.1291
- Upcoming events on February 18: Non-monetary Policy's ECB Meeting; Germany 10-y Bond Auction, US Housing Starts, Building Permits, Producer Price Index and Industrial Production (Jan), FOMC Meeting Minutes
© Dukascopy Bank SA
European officials failed to reach an agreement over a new Greek debt deal after less than four hours of talks in Brussels, as Athens rejected an offer to ask a six-month extension of its international bailout package. It is the second time in recent days that negotiations between the Greek government and Eurogroup have collapsed, reinforcing concerns that Greece is moving closer to a disruptive exit from the Euro zone.
Greece's current financing arrangements expire at the end of the month, but many Euro zone parliaments would require several days to ratify any extension of the bailout. Athens, however, has said it has enough funding to keep the government running for couple of months, whereas some Euro zone officials see Greece running short of cash next month.
Watch More: Dukascopy TV
EUR/USD to be driven by American side on Wednesday
On Wednesday of the current week, all major news releases are going to be published in the United States. They are going to include construction sector, industrial production and PPI data for January. Moreover, the Fed is due to publish its minutes of the last meeting. This data is expected to have the most significant impact on all USD crosses, including the EUR/USD one. At the same time, European counties will not publish any important statistics on February 18.Read More: Fundamental Analysis
EUR/USD set to weaken in the long-term
The long-term outlook for the EUR/USD currency pair is remaining bearish. On January 22, the ECB has made a long-awaited decision to expand its asset purchases 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 may take place, but their impact and size are not expected to be appropriate for the common currency to commence a stable recovery in the long-run. 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
On Monday, the EUR/USD currency pair declined in its value as the single currency was sent downwards by a major level at 1.14. As a result, the cross violated the closest support level represented by the weekly pivot point at 1.1366 and even went slightly below this line. According to technical studies, the pair may stabilise around 1.1350 during next 24 hours, while a decline toward weekly S1 at 1.1291 is assumed to take place in the medium-term.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Pending orders on EUR/USD return back to negative distribution
On the other hand, SWFX commands to acquire the Euro in 100-pip range from the current market price changed back to negative to reach just 36% in the morning on Tuesday. Therefore, long pending orders lost 21% during just 48 hours of trading. It proclaims that in case of pair's increase in price, its medium-term gains are likely to be limited by the monthly pivot point at 1.1496.
On the other hand, a potential decline of the Euro is considered to be possibly extended down to the weekly S2 at 1.1194 in the mid-term.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jan 17 and Feb 17 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 54% of them, believe the exchange rate will drop down even more below 1.12 in ninety days, with 29% alone seeing it below 1.08. Alongside, 21% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of May of this year.
© Dukascopy Bank SA