EUR/USD's gains capped by monthly PP

Note: This section contains information in English only.
Source: Dukascopy Bank SA
  • Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are marginally bullish (52% long / 48% short)
  • The closest resistance for this pair is located at 1.1137
  • At the same time, the nearest support is currently placed at 1.1094
  • Upcoming events in the next 24 hours: US Monthly Budget Statement (Jun)

© Dukascopy Bank SA
Waning Greek fears were strongly reflected in the performance of the Euro against its peers on Friday. The 19-nation currency added the most versus the safe-haven Japanese yen, with market participants acquiring the Euro as hope returned that Greece and its creditors will reach a deal by the weekend. EUR/JPY has therefore surged as much as 2.25%, while the Euro's crosses with Kiwi, Greenback and Aussie have also jumped more than one percentage point.

European leaders have failed to break the deadlock in the Greek debt crisis, with the country's future in the Euro bloc remaining uncertain. Greek Prime Minister Alexis Tsipras has been pressured during the summit to accept extremely tough austerity measures in return to a third bailout worth 82-86 billion euros. The draft statement urges the Greek parliament to approve tax and pension reform measures to reduce the country's budget deficit, and it suggests Greece privatize $56 billion of its assets and use the proceeds to reduce its debt. Tsipras has three days to enact demands of European leaders. In case the agreement is not reached, negotiations will begin on Greece's temporary exit from the Euro zone.

Meanwhile, industrial output of France, the Euro zone's second biggest economy, recovered in May, rising 0.4%, when measured on a monthly basis. The increase followed a revised 0.8% decline posted in April. In annual terms, French industrial output surged 2.8%, compared with 0.2% rise a month earlier. At the same time Italy's industrial production rebounded in May following a rather poor performance in the preceding month. Industrial output rose 0.9% on month in seasonally adjusted terms. Measured on an annual basis, production surged 3% in the reported month, following the 0.1% increase in April.

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US budget balance to swing into surplus in June

The US federal budget balance has most probably entered a positive territory last month. Revenues are likely to exceed spending by around $41 billion in June, up from an $82.4 billion deficit seen in May, but down from a $70.5 billion surplus in June of the previous year.


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 September. In the medium-term the common European currency may show spikes as high as 200-day SMA and 2005 low at 1.16, but the downtrend will remain the main resistance and should be capable of pushing the cross back in the direction of 1.05-1.10 area in the long run.

Daily chart
© Dukascopy Bank SA

EUR/USD rebounded in the direction of monthly pivot point on Friday. The pair reached its new July high at 1.1215, but was eventually forced to fall back below 1.1156. Trading continues on the green side Monday, despite lower opening levels during the Asian session. Nonetheless, the short-term outlook will stay moderately bearish, unless the Euro closes rises above the 55-day SMA at 1.1172. Moreover, daily indicators are signalling to the downside at the moment.

Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis

EUR/USD sentiment volatile, long pending orders surpassed 50%

Sentiment among SWFX market participants has been swinging around 50% for a fourth consecutive day, while the share of bulls decreased from 51% to 48% over the weekend. In the meantime, OANDA traders are holding just 38.19% (+3%) in long open positions, making the EUR/USD's sentiment the second lowest one among all major currency pairs there. Saxo Bank clients are also strongly pessimistic towards the shared currency, where bulls are accounting for just 37% of all traders in the morning on Friday.

Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price has finally increased above the 50% mark, by increasing slowly in the past six trading days to reach 52% today.

It now proclaims that in case the EUR/USD rises in value, the pair's near-term gains are likely to be extended up to the 55-day SMA, currently at 1.1172. On the other hand, a downward development of the Euro should be capped by the weekly pivot point at 1.1094.







Spreads (avg,pip) / Trading volume / Volatility



Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 13 and Jul 13 expect, on average, to see the currency pair around 1.12 by the end of October. Though the majority of participants, namely 49% of them, believe the exchange rate will drop below this mark in ninety days, with 36% alone seeing it below 1.08. Alongside, 21% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of October of this year.
© Dukascopy Bank SA

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