- Pending orders in 100-pip range from the current market price are negative (32% bullish / 68% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1857
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1754
- Upcoming events on January 15: Eurozone Trade Balance, US Unemployment Claims and Philadelphia Fed Manufacturing Index, Bundesbank President Jens Weidmann Speech
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Greece's snap general elections on January 25 will not affect the ECB's monetary policy decisions, as the central bank considers whether to deploy QE programme at a meeting on January 22, ECB Executive Board member Benoit Coeure said. Meanwhile, the Governing Council member Christian Noyer said that the ECB should limit the size of any government bond-buying programme to ensure that private sector investors are not crowded out. Such a cap should restrain any ECB purchases to a certain share of each country's outstanding debt.
Noyer also said that policy makers are divided on the timing of QE programme launch, as some believe that the central bank should have embarked on the bond-purchase plan months ago, while others deem that the ECB should wait.
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Eurozone to issue trade balance data for November tomorrow
As expected, Thursday is likely to be dominated by statistics from Unites States once again. Eurozone's statistical office Eurostat will only publish data on the trade balance in the currency bloc for November; however, market assumes this statistics to have little impact on main Euro crosses. Alongside, US unemployment claims for the week ended January 9 are expected to increase slightly, while the producer price index is forecasted to decline for the second consecutive month.Read More: Fundamental Analysis
EUR/USD sets 2005 low as new long-term goal
The long-term outlook for the EUR/USD currency pair is remaining bearish both in short and long-term. Additionally, the cross has recently managed to reach the lowest point of the previous year at 1.2096, just before it ended on December 31. Moreover, in January the pair continued declining well-below the 1.20 major level. Taking into account the present situation and bearish outlook for the Euro, the pair is likely to drop down to 2005 low at 1.1639 in the medium-term, even though a short-term rebound up to 1.21 is not excluded. Moreover, analysts suggest that in case of Eurozone's QE later this year the single currency may fall further and trade towards 1.10.Daily chart
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It seems that bears gained some strength around the level of weekly pivot point at 1.1857, as the EUR/USD dropped on Tuesday below 1.18 major level and went even further to the south. It breached the monthly S2 support line and was stopped only by current year's low at 1.1754. Taking into account bearish indicators on a daily chart, a violation of 2015 low/weekly S1 around 1.1745 is possible in the near term. In case of failure, the Euro is likely to show some minor bullish development back to 1.18.
Hourly chart
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Read More: Technical Analysis
Opened positions remain slightly bullish on EUR/USD
Meanwhile, pending orders to acquire the single currency versus the US dollar are remaining bearish, even though volatility from day to day is rather high, as longs have only 32% of them at the moment (37% yesterday). It implies that, in case the pair increases in price, in the medium-term bearish pressure may stop the pair from climbing further around the weekly PP at 1.1857.
On the other hand, if the Euro declines, total losses may potentially extend down to 2005 low at 1.1639 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community still expects Euro to decline against US dollar
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Read More: Community Forecasts
Ticker, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that the EUR/USD currency pair will decline due to potential quantitative easing measures of the ECB, totalled 500 billion euros, according to expectations. He also adds that the "Euro weakness is to continue this week (negative news help), US dollar is still on rise, while oil price drops till $45."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Dec 14 and Jan 14 expect, on average, to see the currency pair around 1.2150 by the end of April. Though the majority of participants, namely 43% of them, believe the exchange rate will drop down to the 1.22/1.16 broad region in ninety days. On top of that, the 18% of those surveyed reckon the price will trade below 1.16 by the end of April of this year.
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