- Commands to buy the Euro versus the US Dollar in 100-pip range from spot dropped considerably and are now strongly negative (33% bullish / 67% bearish)
- At the moment, the closest resistance for the pair is located at 1.1379
- In case of development to the south, the closest support is currently placed at 1.1225
- Upcoming events on February 13: Eurozone, Germany, France and Italy Gross Domestic Product (Q4), Eurozone Trade Balance (Dec)
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The German Chambers of Commerce markedly upgraded its growth outlook for this year, as plunging oil prices and a weaker Euro are predicted to underpin the Euro zone's powerhouse despite geopolitical tensions in Ukraine and uncertainty about Greece's future in the Euro bloc. The German economy is seen growing more strongly this year than previously expected. The think-tank revised its growth forecast for this year to 1.3% of GDP from 0.8% estimated in autumn last year.
Meanwhile, Greece's officials and Euro zone finance leaders failed to reach an agreement after seven hours talks, but both parties hinted that there was still hope for a deal. Officials said that negotiation will resume next week. Greek Finance Minister Yanis Varoufakis said on Wednesday that the debt-stricken Greece is unable to meet its financial obligations and that there should be a "haircut" at some stage.
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Eurozone GDP data to drive markets on Friday
Friday seems to be the most important day this week in terms of European fundamental statistics. After extremely calm beginning of the week, the EUR/USD pair is likely to be significantly influenced on the last day of the period, mostly from the side of the common currency, rather than US Dollar. Several Eurozone countries are publishing their economic growth numbers for the last quarter of 2014, including France, Germany and Italy, three largest economies of the single currency area.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
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On Wednesday, US Dollar failed to gain bullish momentum in order to send the EUR/USD cross downwards. Moreover, the pair remained completely silent for a third day in a row, while the Euro grew only 20 pips and remained below the 1.1350 mark at the end of the day. Due to important fundamental releases, the pair is expected to become more active on Thursday, while technical indicators still see the cross trading mostly sideways.
Hourly chart
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Pending orders on EUR/USD stay on strong bearish territory
At the same time, SWFX commands to acquire the Euro in 100-pip range from the current market price regained thirteen percentage points they lost on Wednesday and are back to 37% in the morning on Thursday. It proclaims that in case of the pair's increases in price, its medium-term gains are likely to be limited by the monthly pivot point at 1.1496.
On the other hand, if the Euro declines, total losses have a chance to be extended down to 2015 low at 1.1097 in the medium-term.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to decline by February 14
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massimoscalas, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that "if the price breaks 1.13 back to 1.1209 and from there to a minimum of the year, at this point the Euro will be under pressure and a new break could send him to the next support." He also supposed that there are several external risks presently: "There are two geopolitical reasons: Greece and Ukraine. There's a macroeconomic reason as well: US yields rise.".
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jan 12 and Feb 12 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 58% of them, believe the exchange rate will drop down even below 1.12 in ninety days, with 27% alone seeing it below 1.08. Alongside, 16% of those surveyed reckon the price will trade in the range between 1.14 and 1.20 by the end of May of this year.
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