EURUSD: Southerly movement is expected by close
On Tuesday the 26th of June, trading on the euro closed down. Euro bulls lost all of the gains made following the surge witnessed yesterday. The strengthening of the USD forced buyers to lock in profits. As for the weakening of the single currency, I see more technical factors at play than fundamental ones.
Yesterday, I turned my attention to how China is devaluing the yuan to mitigate the impact of US tariffs. The EU will have to follow suit. In this regard, it might be preferable to sell the euro than to buy it. I'm talking about a period of three months. During the US session, the euro fell to 1.1635.
Day's news (GMT+3):
- 11:00 Switzerland: ZEW survey - expectations (Jun).
- 11:00 Eurozone: M3 money supply (YoY) (May).
- 11:30 BOE's Governor Carney speech.
- 15:30 US: durable goods orders (May), goods trade balance (May).
- 16:00 Switzerland: SNB quarterly bulletin.
- 17:00 US: pending home sales (MoM) (May).
- 17:30 US: EIA crude oil stocks change (Jun 22).
- 22:00 Canada: BoC Governor Poloz speech.
Yesterday's expectations for the weakening of the euro were fully justified. Sellers reached 67 degrees, but did not reach the target of 1.1635.
In the Asian session, sellers made a fresh attempt to revisit yesterday's low, but were stopped at 1.1640. A support passes through this level, which was formed from the lows of 1.1618 and 1.1635.
At the time of writing, the euro stands at 1.1660. The pair is trading at the 22nd degree from 1.1635. From above it is covered by the balance line, which is at the level of 1.1670. The balance line is strenghtening the resistance at 1.1640.
From a technical standpoint, I see the euro exchange rate at 1.1614, so I expect the price to fall to the 90th degree.