- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (44% long / 56% short)
- The closest resistance for this pair is located at 1.1003
- At the same time, the closest support is currently placed at 1.0943
- Upcoming events on June 1: France, Germany, Euro zone and US Markit Manufacturing PMI (May), Germany Prelim CPI (May), US Personal Spending (Apr) and ISM Manufacturing PMI (May)
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The European Commission's Economic Sentiment Indicator, a measure of business and consumer confidence, was stable in May, after slightly falling in April from near the highest level in four years in March. The index stood at 103.8 in the reported month, unchanged from April. Overall economic sentiment was mixed across the Euro zone. While it improved in Germany, France, and the Netherlands, it dropped in Italy and Greece. It remained unchanged in Spain.
Meanwhile, confidence in the Euro zone's third biggest economy's manufacturing sector remained strong in May, albeit the indicator fell in the reported month. The Manufacturing Confidence Index slid to 103.5 in May, from 104.0 a month earlier.
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Manufacturing activity data in due on Monday
On the first day of the next week, a number of major economies will release data on activity in their manufacturing industries. The list of countries includes France, Italy, Spain, Germany and the US. In the meantime, the Euro zone's largest economy will publish its prelim inflation data for May on Monday, while US Personal Spending statistical release is due at 12:30 PM GMT.Read More: Fundamental Analysis
EUR/USD likely to lose value, trading range to narrow down
Judging from EUR/USD's developments that took place since May of the previous year, the pair is clearly trading downwards on a long-term chart. At the same time, it seems that now the pair is being bounded between the 2014 low and long-term downtrend line, meaning that it is currently hovering inside the descending triangle pattern. Moreover, this pattern implies a narrowing trading range, while the break-out point can be reached by the end of August. In the medium-term the common European currency may surge up to the 1.1450 mark where long-term downtrend is able to push the cross back in the direction of 1.05-1.10 area. However, the pair can also assume a possibility of growing as high as 200-day SMA around five figures above the downtrend, before finally making a decision to commence a bearish correction.Daily chart
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The EUR/USD pair attempts to recover at least some part of losses that have occurred since May 19. On Thursday, the cross jumped above the 55-day SMA nearest resistance line and closed just below 1.0950. However, any bullish movements are likely to be limited, unless the Euro closes above the monthly PP at 1.1003, as this move will change the short-term outlook to bullish. At the same time, the medium-term weakness is set to remain in place, while the bears' target is placed at 1.0740 (monthly S1).
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment are pending orders are bearish
Meanwhile, the commands to buy the Euro against the US Dollar in 100-pip range from the current market price increased by four percentage points from yesterday to reach 44%.
It proclaims that in case the EUR/USD rises in value, the pair's potential rebound is likely to be limited by the monthly pivot point at 1.1003. On the other hand, a downward development of the Euro can be extended down to monthly S1 at 1.0740.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to drop considerably against the US Dollar this week
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Read More: Community Forecasts
geula4x, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "EUR/USD seems very bearish on the daily chart. Price has dropped sharply from 1.1466 recent highs. Resistance lies around 1.1200 round number. This area has capped price recently on May 21 and 22. Support lies around 1.1050 double-bottom area, which has held price at March 11-16 and April 13-14."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 29 and May 29 expect, on average, to see the currency pair around 1.12 by the end of August. Though the majority of participants, namely 53% of them, believe the exchange rate will trade below this level in ninety days, with 36% alone seeing it below 1.08. Alongside, 22% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of August of this year.
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