- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (42% bullish / 58% bearish)
- The closest resistance for this pair is located at 1.0942
- At the same time, the closest support is currently placed at 1.0893
- Upcoming events on March 25: Germany IFO Business Climate (Mar), US Durable Goods Orders (Feb)
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The Standard & Poor's international ratings agency has increased its outlook for Portugal's sovereign credit ratings, up from "neutral" to the "positive" one. The rating itself, however, remained unchanged at BB/B level. In its review, one of the leading rating agencies in the world along with Moody's and Fitch, pointed on a continuous improvement in country's finances and economic progress during recent times.
In the meantime, Mario Draghi testified on the European Central Bank's monetary policy before the European Parliament's Economic and Monetary Affairs Committee in Brussels on Monday. The ECB President gave a more positive assessment for the Euro area's economy as growth is gaining momentum helped by the QE programme started March 9.
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German IFO business climate expected to improve amid QE
On March 25, the IFO Institute from Germany will release its business climate indicator for the largest economy of the Euro zone for March of this year. Expectations are pointing on an improvement to 107.3 points, helped by the quantitative easing programme launched by the ECB on March 9. In addition to that, US durable goods orders have probably continued to increase in February, with an average forecast for a 0.2% rise.Read More: Fundamental Analysis
EUR/USD set to weaken in the long-term
The long-term outlook for the EUR/USD currency pair remains bearish. On January 22, the ECB decided to expand its asset purchases by buying government bonds since March 9. The programme is likely to continue pushing the Euro downwards. Taking into account present divergence of monetary policies between the European Central Bank and the Federal Reserve, as well as the aggregate bearish outlook for the Euro, the pair will be able to reach the parity in the foreseeable future. Moreover, some market participants suggest it may fall further and even trade below the parity in course of next couple of months, especially when the Fed gives more insight on the federal funds rate's increase.Daily chart
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For a second consecutive day, the EUR/USD currency pair gained more than 100 pips. The single currency expanded above 1.09 and was only capped by the monthly S2 at 1.0942. It tried to cross this major resistance line, but failed to consolidate above 1.0950. Judging from technical indicators, the outlook for EUR/USD remains unclear, being that all of them are mixed at the moment. Therefore, trading range is expected to remain tight in between 1.0850 and 1.10 in the short term.
Hourly chart
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EUR/USD sentiment and pending orders are negative
Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot are accounting for 42% in the morning on Tuesday, a gain of nine percentage points during past 24 hours. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the monthly S2 at 1.0942. On the other hand, a potential downward development of the Euro is considered to be extended down to the monthly S3 at 1.0709.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 24 and Mar 24 expect, on average, to see the currency pair around 1.09 by the end of June. Though the majority of participants, namely 47% of them, believe the exchange rate will even drop below 1.08 in ninety days, with 32% alone seeing it below 1.04. Alongside, 31% of those surveyed reckon the price will trade in the range between 1.08 and 1.14 by the end of June of this year.
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