EUR/USD: euro ready to return to 1.0610
On Tuesday the euro/dollar closed down. The weakening of the euro against the dollar was caused by a correctional phase for the euro/pound. The euro pound fell 98 points to 0.8665. The price corrected by 38.2% upwards from 0.8517 to 0.8763. The euro rate fell from a maximum of 1.0627 to 1.0556 (-71 points) against the dollar. In Asia the pair’s fall hastened to 1.0536.
On Wednesday trader attention is on the press conference for the US’ new president. I didn’t want to make a forecast, but a really interesting picture has been forming on the hourly graph. The price could bounce from 1.0536 or 1.0519. I’ve gone for 1.0519. I reckon that before Trump speaks we will see a fall for the euro. Then we may see a test of 1.0610 (at 67 degrees and the trend line) which was broken yesterday.
Day’s news (GMT+3):
- 12:30, UK November production in the manufacturing industry, balance of trade, spending on construction and industrial production;
- 17:15, BoE’s Carney to speak;
- 18:00, UK Q4 GDP assessment from NIESR;
- 18:30, US changes in oil reserves for the week ending 8th December;
- 21:00, Trump press conference.
Intraday forecast: minimum: n/a, maximum n/a, close: n/a.
Yesterday’s euro expectations came off. The price fell to the LB due to the euro/pound correction. So what can we expect from the euro today? The day will be unpredictable due to Trump’s press conference. Nevertheless, I’ve made a forecast for before the press conference.
The trend line was broken at 1.0564. In accordance with the break, the closest target is 1.0482. The minimum from 5th January is at this level (see graph). On the way down the sellers need to pass a few resistances: 1.0535, 1.0518 and 1.0498. These are the targets for the sellers today.
Using the cycles I’ve arrived at a bounce with a strengthening of the euro to 1.0610. The price could bounce from the current level or from 1.0519. I’ve chosen 1.0519. At the very least, the 90th degree passes through it. The support is stronger than 1.0535. If the price lags in its growth from the forecast, it’d be better to give trading a miss today.