- 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 1.0811
- At the same time, the closest support is currently placed at 1.0759
- Upcoming events on April 21: Germany ZEW Economic Sentiment (Apr)
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The Euro zone's inflation remained stuck in negative territory in March, but return to positive price growth is around the corner. Annual inflation in the 19 countries sharing the Euro was -0.1% in March, Eurostat confirmed the preliminary estimate, following the 0.3% decline a month earlier. However, only nine out of the Euro zone's 19 member states are now in deflationary territory, down from 17 in January.
In addition to that, month-on-month cost of living rose by 1.1%, indicating a slide into entrenched deflation is now unlikely. Thus, it is expected that consumer prices may enter positive territory as soon as April. The monthly increase in core inflation, which irons out volatile food and energy components, was at 1.2%.
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German economic confidence to show further improvement
Tuesday will deliver only one important statistical indicator that is expected to drive considerably the EUR/USD currency pair. ZEW Centre for Economic Research in Germany will publish its economic sentiment indicator for April, which is estimated to grow to 55.3 points, up from 54.8 in March. Meanwhile, the US side is forecasted to remain without major news tomorrow.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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EUR/USD's upside correction reached the monthly pivot point at 1.0811 on Friday. This level represents a strong supply area which is most likely going to push the single currency to the downside in the short-term. The pair should decline below 1.0724 for the bearish outlook to become confirmed, as it will allow the Euro to slump as low as 1.06 in the next few days. In the meantime, negative outlook is supported by weekly and monthly technical indicators at the moment.
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 are down three percentage points over the weekend and stay at 42% at the moment. 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 20 and Apr 20 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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