The euro/dollar during the American session was able to restore to 1.1230 after a fall to 1.1187 at the start of the New York session. The PMI came out worse than expected, thereby aiding the euro to strengthen against the USD.
The preliminary PMI in the manufacturing sector fell in May to 50.5 from 50.8 in April (forecasted: 51.0).
The pair has been trading sideways between 1.1179 and 1.1240 for the past three days. On the daily the sellers have the road to 1.11 open. They need to pass 1.1180.
One thing deserves attention. The sellers can’t pressure the euro under 1.12 due to the weak US stats. There was a sharp upward bounce on 19th and 23rd May. I say this is to do with the technical picture on the daily. The daily indicators are indicating an upward correction. The situation is unclear, therefore it’s necessary to wait for the price to exit the price range. Today I’ve earmarked a 1.1188 – 1.1222 range. I looked over the different price patterns this morning. For me it’s a V-shape. I haven’t bothered to come up with a scenario on the graph for a break through the range, I just indicated the movement in points and as a percentage
Day’s News (EET):
- 12:00, German and Eurozone economic sentiment index from ZEW for May and UK parliamentary questions on inflation: BoE’s Carney, Broadbent, Weale and Vlieghe to speak;
- 13:00, UK retail sales from CBI for May;
- 15:00, ECB financial stability report;
- 17:00, US April new housing sales and Richmond Fed manufacturing activity in May.
Intraday forecast: minimum: 1.1188, maximum: 1.1222, close: 1.1208.
Euro/dollar rate on the hourly. Source: TradingView
The euro/dollar is trading in a sideways trend. The trend line is squeezing the buyers from above. The buyers are trying to defend 1.1180. On Tuesday I reckon we’ll see movements within a 1.1188 – 1.1222 range. It’s not 100% that the price will keep trading between these levels. I think that the daily indicators could do with offloading. Euro sales would be best at 1.1320 – 1.1350.