- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bearish (47% long / 53% short)
- The closest resistance for this pair is located at 1.1294
- At the same time, the closest support is currently placed at 1.1245
- Upcoming events on June 5: Germany Factory Orders (Apr), Euro zone Revised GDP (Q1), US Non-Farm Payrolls (May) and Unemployment Rate (May)
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The European Central Bank left its benchmark rates unchanged at their all-time lows for already the seventh consecutive rate-setting meeting. Mario Draghi, ECB President, said that low oil prices should boost private consumption and demand, and said that the weakness in the Euro is expected to support trade for Euro area countries. The ECB revised its inflation outlook, with consumer prices in the 19-nation bloc expected to climb 0.3%, 1.5% and 1.8% in 2015, 2016 and 2017, respectively. The gauge is seen staying low in the months ahead and accelerate its growth later in the year, Draghi said.
Still, inflation is predicted to remain well below the central bank's target - close to, but below 2%. Meanwhile, the GDP growth projections remained virtually intact with the exception of 2017, for which the bank revised its outlook down by one notch. It said it expected increase in GDP by 1.5%, 1.9% and 2% in 2015, 2016 and 2017, respectively.
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US payrolls to increase in May
Non-farm payrolls in the United States have probably increased by 3,000 in May on a monthly basis, up to 226,000. This data will be published on Friday at 12:30 PM GMT. Meanwhile, German factory orders are forecasted to grow for a second consecutive month in April by adding 0.6%. In the meantime, the Euro area's Q1 GDP is not likely to be revised. Economy of the single currency bloc climbed 0.4%, according to the preliminary estimate.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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For the first time since May 18 the EUR/USD cross is nearing the long-term downtrend line. On Wednesday the common currency surged by additional 130 pips and penetrated the weekly R3, while closing the trading at 1.1273. This move has neutralised the medium-term outlook, while for further gains the pair should consolidate above the monthly R1 at 1.1360. However, the Euro will at first suggest an attempt on the topside to reach the immediate resistance at 1.1294 (23.6% Fibo).
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment remains bearish, while orders return back below 50%
Meanwhile, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price have partly lost gains that were accumulated since Tuesday. Right now long commands are in the minority again, as their share fell by 10% to 47%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be limited by the long-term downtrend, currently at 1.1334. On the other hand, a downward development of the Euro should possibly extend as low as the monthly pivot point at 1.1089.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to depreciate against the US Dollar this week
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Read More: Community Forecasts
aslamhammad, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "EUR/USD will close lower on this Friday 5th of June." He also expects "the European Interest rate to remain unchanged at 0.05%."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 4 and June 4 expect, on average, to see the currency pair around 1.12 by the end of September. Though the majority of participants, namely 58% of them, believe the exchange rate will trade below this level in ninety days, with 40% alone seeing it below 1.08. Alongside, 18% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of September of this year.
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