- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (40% bullish / 60% bearish)
- The closest resistance for this pair is located at 1.0895
- At the same time, the closest support is currently placed at 1.0759
- Upcoming events on March 31: Germany Retail Sales (Feb) and Unemployment Change (Mar), Italy Unemployment (Feb), France Consumer Spending (Feb), Euro zone CPI (Mar) and Unemployment Rate (Feb), US Consumer Confidence (Mar)
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According to the report of the Federal Statistical Office of Germany, Destatis, import prices in the Euro zone's biggest economy have jumped noticeably in February 2015, calculating on month-to-month basis. The indicator, which measures prices of imported goods purchased on a domestic market, gained 1.4% last month from the previous one. It followed four consecutive months of losses for import prices and particularly a 0.8% drop in January.
At the same time, retail sales in Italy, the third largest economy of the monetary bloc, rose slightly in January by 0.1% month-on-month. The result was in line with estimates and came after an upwardly revised 0.1% decrease in December. Contributing a large share to the economy, retail sales are playing important role in Italy's recovery which has been weak since financial crisis began in 2008.
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Euro zone inflation to remain negative despite QE
In spite of potential positive effects from the QE programme launched by the ECB earlier this year, inflation reading in the Euro zone is expected to stay on the negative territory in March of this year. However, deflationary pressure has probably eased from -0.3% to -0.1% this month, according to median economists' expectations. In the meantime, tomorrow Germany is publishing data on retail sales and labour market, which may have noticeable influence on markets throughout the trading day.Read More: Fundamental Analysis
EUR/USD likely to lose value with growing trading range
Judging from EUR/USD's developments that took place since July of the previous year, the pair is clearly trading downwards with a significant negative slope. At the same time, mid-March movements of the Euro have also confirmed a widening trading range of this currency pair, meaning it is currently hovering inside the broadening falling wedge pattern. By the end of April, the common European currency is expected to surge up to the 1.17 mark where 2005 low and 38.2% Fibonacci retracement will most probably push the cross back in the direction of 1-1.05 area. In the meantime, the Euro may hit 1:1 against the US Dollar as soon as by the end of July 2015. However, a presence of dense zone of technical levels may also considerably influence the time-frame for this important event.Daily chart
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After being stopped by the Dec-Mar long-term downtrend line on Thursday, EUR/USD remained under pressure during last day of the week as well. Trading range was rather significant as it reached 150 pips on Friday. However, both opening and closing levels were located close to each other just below the 20-day SMA at 1.0885. At the moment, bearish scenario seems more realistic, taking into account strong supply zone between 1.09 and 1.095 that is unlikely to let bulls succeed in the near term.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are negative
Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot are accounting for 40% in the morning today, up one percentage point during past 72 hours. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the long-term downtrend around 1.10. On the other hand, a potential downward development of the Euro is considered to be extended down to the 2003 low at 1.0759.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 30 and Mar 30 expect, on average, to see the currency pair just below 1.08 by the end of June. Though the majority of participants, namely 54% of them, believe the exchange rate will drop considerably below this mark in ninety days, with 41% alone seeing it below 1.04. Alongside, 25% of those surveyed reckon the price will trade in the range between 1.08 and 1.14 by the end of June of this year.
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