- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bullish (61% long / 39% short)
- The closest resistance for this pair is located at 1.1294
- At the same time, the nearest support is currently placed at 1.1242
- Upcoming events in the next 24 hours: France, Germany, Euro zone Manufacturing and Services PMI (Jun), US Manufacturing PMI (Jun), New Homes Sales (May) and Durable Goods Orders (May), France GDP (Q1)
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A ray of hope emerged in what seemed an endless standstill over the Greek debt situation. After Greece's European partners welcomed an offer from Athens to cut its pension bill and raise extra money from VAT, hopes for a deal rose sharply and Greece stepped back from the abyss. The reform proposal included a new tax on businesses, on the wealthy and some increases in the VAT rate on particular items.
Athens had also agreed with the International Monetary Fund and Euro area officials that the targeted budget surplus would be 1% of GDP this year, 2% next year and 3% the year after. Brussels called Greece's offer "detailed, credible and impressive", and saw it as the basis for an agreement that would have further bailout funds released to Greece. European Council President Donald Tusk called the Greek proposal "a positive step forward", and said the aim was to have the European finance ministers approve a cash-for-reform package on Wednesday evening and put it to Euro area leaders for final endorsement on Thursday morning.
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Euro area PMI to improve slightly in June
Manufacturing activity in France has probably advanced for the first time since April 2014, as the PMI indicator for this sector of the country's economy is expected to increase up to 50.1 points in June from 49.4 in the preceding month. Along with that, some marginal improvements are also forecasted to take place in Germany, the European powerhouse, and the whole Euro zone. Data for France and Germany is due today at 7:00 AM GMT and 7:30 AM GMT, respectively, with the European data to be released later at 8:00 AM 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 1.1330 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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Despite optimism from the Greek debt negotiations, EUR/USD lost value on Monday, by falling back below the monthly R1 at 1.1360. Moreover, losses were extended on Tuesday, following bearish comments from Goldman Sachs about the Euro. As a result, the pair dropped below the 23.6% Fibo at 1.1294 and may slump even further, in case weakness persists throughout the day. The nearest support is represented by 20-day SMA at 1.1242, followed by the weekly S1 at 1.1213. A penetration of them will clear the way towards the monthly PP at 1.1089.
Hourly chart
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EUR/USD sentiment shows minimal rebound
Meanwhile, pending orders to buy or sell the Euro against the US Dollar in 100-pip range from the spot price bounced off in the past 24 hours, by adding nine percentage points to 61%, the highest mark in more than one month.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be prolonged as high as the monthly R1 at 1.1360. On the other hand, a downward development of the Euro is likely to be limited by the weekly S1 at 1.1213.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 23 and Jun 23 expect, on average, to see the currency pair around 1.11 by the end of September. Though the majority of participants, namely 55% of them, believe the exchange rate will trade even below 1.10 in ninety days, with 32% alone seeing it below 1.06. Alongside, only 14% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of September of this year.
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