The downward correction on Thursday went deeper than expected. After a renewal of the session maximum, the euro corrected to 1.1024 (forecasted: 1.1070). A sharp rebound was caused by a weakening of the pound after the BoE’s Mark Carney spoke. He promised to loosen UK monetary policy after summer.
During Carney’s speech, the pound/dollar crumbled two figures, whilst the euro/dollar fell just one. The euro was held from weakening by the euro/pound cross rate. By the close of the day, the price had restored to 1.11 from 1.1024.
Today is Friday; an unpredictable day. Due to this, I expect the euro to yoyo. I wouldn’t count out the euro returning to 1.1060 before it starts strengthening. I expect it to revive to 1.1143. If Norway starts striking and oil lifts above $51, the target will lift to 1.1180.
Day’s News (EET):
- From 10:15 to 11:00, June PMI data for Spain, Italy, Germany and the Eurozone;
- 10:15, Swiss May retail sales;
- 10:30, Swiss PMI in the manufacturing sector for June;
- 11:30, UK PMI in the manufacturing sector for June;
- 12:00, Eurozone May unemployment level;
- 16:45, US PMI in the manufacturing sector for June;
- 17:00, US June business activity in the manufacturing sector and June PMI from ISM;
- 23:00, operative extraction rig data from Baker Hughes.
Intraday forecast: minimum: 1.1060, maximum: 1.1143, close: 1.1114.
Euro/dollar rate on the hourly. Source: TradingView
Mark Carney managed to correct the euro to 1.1024. The euro was bought from here. The price returned to 1.11. The pair is currently trading at the LB (1.1093). This means that the pair is balanced on the hourly, with the price ready to stray. Since there were real swings yesterday, my forecast maximum of 1.1143 is below yesterday’s 1.1154 maximum. As I said above, if a barrel of Brent heads above $51, the target should be shifted from 1.1143 to 1.1180.