Previous:
On Wednesday the euro/dollar closed down. The price fell to 1.1020. The FOMC minutes didn’t aid the euro bulls. The USD continues to strengthen on expectations that the US Fed will increase rates. According to the minutes, three members of the committee voted for a hike in September. This means that it won’t be worth sacking off your accounts during the November meeting. Maybe there will a surprise if the stats meet the expectations. Here I’m talking about the labour market and CPI data.
Market expectations:
With each day that the euro falls, the number of those wishing to purchase euro rises. According to data from myfxbook, 80% of traders are in long positions with a total volume of 15,371 lots. With a 20/80 split, the market will look for another balance point and throw all of the unneeded buyers straight off the boat. Due to this, I expect a renewal of the minimum to 1.0989. If the euro/pound cross hastens downwards, we could see an approach to 1.0964.
Day’s News (GMT+3):
- 09:00, German definitive September CPI;
- 15:30, Canadian first-time housing sales in August; US initial unemployment benefit claims for week ending 8th October and September import prices;
- 18:00, US oil reserves for week ending 8th October.
Technical Analysis:
Intraday forecast: minimum: 1.0988, maximum: 1.1038, close: 1.1013.
Euro/dollar rate on the hourly. Source: TradingView
The 1.1035 level has been passed. The next interim level on the daily is 1.0978. In my forecast I’ve limited myself with the 202nd degree. Keep an eye on the euro/pound cross. A general strengthening of the dollar and a fall in the cross will mean the euro/dollar will fall below 1.0989 to 1.0964.
If we take the MA line D3 in our calculations, the path is free to 1.0931. Don’t be stood catching falling knives. On the rebound it would be better to sell euro. Since the euro has been falling for three days in a row, we could see an upward correction. Don’t get carried away with the volumes. Between the AO indicator and the price we can see a bull divergence has formed. i.e. now the sellers are already starting to partially close short positions.