- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (39% bullish / 61% bearish)
- The closest resistance for this pair is located at 1.0896
- At the same time, the closest support is currently placed at 1.0773
- Upcoming events on March 28-30: Euro zone Consumer Confidence (Mar), Germany CPI (Mar), US Personal Spending (Feb) and Pending Home Sales (Feb)
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Among fundamentals, France has unexpectedly decreased its budget shortfall in 2014, while analysts expected the weakened country's economy to have more negative impact on public finances. The fiscal gap in the Fifth Republic slumped to 4% of GDP last year, down from 4.1% in 2013 and lower than 4.4% initially predicted by the government. According to the French Finance Minister Michel Sapin, many local authorities managed to decrease their negative budget balances, thus positively contributing to the overall situation.
At the same time, on Thursday the market research group GfK published its consumer climate index for Germany. It showed a stable positive development and an increase from 9.7 points this month up to 10 points for April. All sub-indicators, including income and economic predictions and readiness to buy strengthened, therefore giving further signs of economic expansion.
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Euro area consumer sentiment and US spending to be released on Monday
In the beginning of the next working week, the European Commission will release numbers on consumer morale in the Euro zone, while analysts are expecting some improvements as economy is starting to rebound. Moreover, German CPI will be in focus of economists as well, especially after oil prices began weighing considerably on this indicator.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 April, the common European currency is expected to surge up to the 1.17 mark where 2005 low and 38.2% 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 by the end of July 2015. 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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As expected, the EUR/USD failed to push itself through a major resistance area around 1.1050, comprised of monthly S1, weekly R1 and long-term downtrend line. Moreover, it seems that the latter level had the most impact on the pair yesterday. As a result, the common currency plunged below monthly S2 to reach 1.09. At the moment, there are no supports to energize the Euro until weekly PP at 1.0773; therefore, a decline towards this level can currently be expected to take place.
Hourly chart
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Read More: Technical Analysis
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 39% in the morning today, up four 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 long-term downtrend around 1.1050. On the other hand, a potential downward development of the Euro is considered to be extended down to the 2003 low at 1.0759.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to trade sideways this week
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Read More: Community Forecasts
independenceday32, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that after the pair returned back above the 1.05 mark "chances that the pair remains in range between 1.05 and 1.10 are high." On the other hand, aslamhammad is currently bearish on the pair. He says that "My sentiment is bearish for the EUR/USD. Taking into account that USD/CAD is currently trading near yearly highs, with low crude oil commodity prices. Therefore, I am expecting deflation in Europe."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 27 and Mar 27 expect, on average, to see the currency pair around 1.08 by the end of June. Though the majority of participants, namely 52% of them, believe the exchange rate will drop down even below this mark in ninety days, with 39% alone seeing it below 1.04. Alongside, 27% 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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