- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bullish (52% long / 48% short)
- The closest resistance for this pair is located at 1.1028
- At the same time, the nearest support is currently placed at 1.0954
- Upcoming events in the next 24 hours: Euro zone Economic Sentiment Indicator (Jun), Germany CPI (Jun), US Pending Home Sales (May), Greece Bank Holiday
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The Greek debt talks have turned to full-blown crisis, with closed Greek banks, imposed capital controls and the Euro set for a freefall. Greece's parliament has approved a referendum to decide whether to accept the latest bailout terms. Yet, it comes too late, as the vote should be called at least a month ago, and asks the wrong question, as the current bailout programme expires.
The move came after the breakdown of aid talks with the international creditors and the ECB's decision to freeze the lifeline to Greek banks. Meanwhile, European officials discussed quarantining Greece from the rest of the currency bloc, while keeping it within the Euro zone. German Chancellor Angela Merkel spoke to President Barack Obama on Sunday, agreeing on the importance of keeping Greece in the Euro.
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Greek banks to be closed on Monday, German inflation data is due
Following a shock decision of the Greek government to reject a deal with its creditors and hold a referendum on the proposals, the Greeks are now withdrawing money from the banking system, therefore putting additional pressure on it. The capital controls have already been imposed at 60 euros per day, while banks are going to be closed at least Monday and possibly later this week. Meanwhile, other important events today will include German inflation in June at 12:00 PM GMT and pending home sales in the US for May at 14:00 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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EUR/USD collapsed in the morning on Monday, overshadowing developments that took place before the weekend on Friday, as Greece rejected the deal, called a referendum and imposed capital controls on banks. The pair's began trading just above 1.10 today, down 160 pips from Friday. From the perspective of the technical analysis, while the Euro remains below monthly PP at 1.1089, the outlook will remain strongly negative for the short-term.
Hourly chart
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EUR/USD sentiment still bearish, long pending orders rebound
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price surged by twelve percentage points from Friday to 52%, helped by a drop in value of the shared European currency against the Greenback.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be extended up to the 100-day SMA, currently at 1.105. On the other hand, a downward development of the Euro is likely to be limited by the weekly S2 at 1.0954.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 29 and Jun 29 expect, on average, to see the currency pair around 1.12 by the end of September. Though the majority of participants, namely 53% of them, believe the exchange rate will trade below this level in ninety days, with 33% 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 September of this year.
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