- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (38% long / 62% short)
- The closest resistance for this pair is located at 1.0973
- At the same time, the nearest support is currently placed at 1.0916
- Important economic events to follow in the next 24 hours: Euro zone Final CPI (Jun) and Trade Balance (May), ECB Interest Rate Decision and Press Conference, ECB Greek ELA Decision, Eurogroup Teleconference, Fed Chair Yellen Testifies, US Unemployment Claims (Jul 10)
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An overwhelming majority of Greek parliamentarians approved a raft of painful austerity measures demanded by the country's international creditors in exchange for a third bailout package worth 86 billion euros. With Greek banks being closed for more than two weeks, and the nation's economy on the edge of collapse, Prime Minster Alexis Tsipras had called for the adoption of belt-tightening measures. Tsipras admitted that while it was a difficult deal, it was the only one available and would prevent humanitarian and fiscal disaster. Some 229 lawmakers voted in favour, 64 appeared to be against, while six abstained.
Yet, it remains unclear whether Greece's creditors will be able to find a compromise on the bailout. The IMF has delivered an ultimatum, saying it will not participate in a rescue unless the deal offers enough debt relief, something that Germany and other Northern European countries are reluctant to agree on. Euro zone finance ministers will hold a conference call to discuss Greece later today.
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All eyes on ECB as it is due to make Greek ELA, key rate decision
Following the positive Greek vote yesterday, all attention is now refocusing on the European Central Bank. At first, the regulator is expected to make a decision on the Emergency Liquidity Assistance for Greek banks, which will be able to open only with external help. Following that, the Governing Council will hold a scheduled monetary policy meeting. While the main refinancing rate is forecasted to remain flat at 0.05%, the markets are waiting for Mario Draghi's press conference and his comments on Greece.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 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
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Dollar-bullish remarks from Janet Yellen sent EUR/USD noticeably to the downside on Wednesday. The pair has successfully overcome the nearest support at 1.0973 (weekly S1), but was capped by this month's low at 1.0916. Still, daily technical indicators are confirming their bearish intentions. Therefore, the Euro may set a new July low in the near term, while the main focus is on the monthly S1 at 1.0875 at the moment.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment grows further, pending orders weaken
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price decreased from 40% to 38%.
It indicates that in case the EUR/USD rises in value, the pair's near-term gains are likely to be limited by the 100-day SMA at 1.1012. On the other hand, a downward development of the Euro can be extended as low as monthly S1 at 1.0875.
Spreads (avg,pip) / Trading volume / Volatility
Community sees the Euro rebounding versus the US Dollar this week
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Jignesh, one of the community members participating in the survey, motivates his positive outlook towards the common currency by saying that "EUR/USD continues to struggle to take out weekly support at 1.0970. Last week, we once again saw strong buying in that area, leaving the pair to close with a bullish candle for the week. Dips should be bought this week as the US Dollar continues to be sold off against strong daily resistance."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 16 and Jul 16 expect, on average, to see the currency pair at 1.11 by the end of October. Though the majority of participants, namely 53% of them, believe the exchange rate will even drop below 1.10 in ninety days, with 34% alone seeing it below 1.06. Alongside, 20% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of October of this year.
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