- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bearish (49% long / 51% short)
- The closest resistance for this pair is located at 1.1213
- At the same time, the nearest support is currently placed at 1.1089
- Upcoming events in the next 24 hours: Germany IFO Business Climate (Jun), US Final GDP (Q1)
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Euro zone's manufacturing and services sectors have enjoyed a strong performance this month as growth gained steam in the region's biggest economies, Germany and France. According to Markit Economics, the composite index rose to 54.1 in June, up from 53.6 a month earlier, overshooting economists' expectations for a decline to 53.5. France's reading measuring business activity of the two industries surged to the highest level since 2011, while growth in Germany also strengthened.
Markit's French composite index rose to 53.4 from 52, the strongest reading since August 2011, as both manufacturing and services strengthened. The flash manufacturing PMI in France came in at 50.5 in June, better than the May's final reading of 49.4, reaching a 14-month high. The flash services PMI came in at 54.1 in the reported month, compared to the 52.8 seen in May, hitting a 46-month high. Germany's composite index of services and manufacturing increased to 54 from 52.6 in May, beating the median estimate for a reading of 52.7. Markit's manufacturing index for Germany climbed to 51.9 from 51.1 in May, while the services measure rose to a three-month high of 54.2 from 53.
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US GDP to be revised back upwards
Today markets are awaiting the data on US GDP and more precisely the last reading of this indicator for the first quarter of 2015. Following a considerable downward revision to -0.7% that took place with the second-estimate, at the moment analysts are suggesting the world's biggest economy was down just 0.2% in January-March, as somewhat more positive fundamentals improved the country's economic outlook. The numbers are expected to be published 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 1.1330 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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The nearest EUR/USD's targets have been reached yesterday, as the pair plummeted the most since May 19 and was pushed below 1.12. After violating the 20-day SMA and weekly S1, the space down to the monthly PP at 1.1089 is free from any technical levels at the moment. Therefore, a further decline is not off the table completely, even though daily and weekly technical indicators are waiting for a rebound of the Euro in the short and medium-term.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment adds two percentage points, long pending orders fall below 50%
Meanwhile, pending orders to buy or sell the Euro against the US Dollar in 100-pip range from the spot price dipped significantly in the past 24 hours, as the buy ones fell below the 50% threshold for the first time in six days. All in all, their share lost 12% to 49%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the weekly S1 at 1.1213. On the other hand, a downward development of the Euro is likely to be extended down to the monthly pivot point at 1.1089.
Spreads (avg,pip) / Trading volume / Volatility
Community suggests the Euro will decline against the US Dollar this week
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Read More: Community Forecasts
Jignesh, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "the US Dollar is very well supported this week as the index is showing reversal signs around a key retracement. As well, we are seeing pressure from Greece building up and bears renewing shorts to start out the week once again."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 24 and Jun 24 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 this level in ninety days, with 31% 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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