EURUSD: downwards movement expected to continue
Trading on the Euro closed down on Tuesday. Before the US session, the pair was trading above the support zone of 1.1132/40. The EURGBP cross helped to counter the weakening of the Euro as it sharply rose on comments from Bank of England governor Mark Carney, who iterated that now is not the time to raise interest rates. The British pound has fallen by 155 pips to 1.2603.
The support was successfully broken through during the US session thanks to a surge for the dollar across the market. The EURUSD rate fell to 1.1119 and then went into a correctional phase. The EURGBP cross consolidated at 0.8816 for several hours.
In Asia, the Euro is trading slightly down (-0.03%). The EURGBP cross, the GBPUSD and EURUSD are all looking down. At the moment, there is nothing to stop sellers from bringing the rate back down to 1.1081 – 1.1090. Europe’s calendar is bare today.
Day’s news (GMT+3):
- 11:30 UK: public sector net borrowing (May);
- 14:00 UK: MPC member Haldane’s speech;
- 16:00 Switzerland: SNB quarterly bulletin;
- 17:00 USA: existing home sales (May);
- 17:30 USA: EIA crude oil stocks change (16 Jun).
Intraday forecast: low: 1.1093, high: 1.1138 (current in Asia), close: 1.1103.
Buyers have long held their defenses above 1.1138. After a correction on the cross and a surge for the US dollar, sellers managed to break the support. I believe that the downwards movement started in Europe will continue. I’m expecting our pair to fall to around 1.1081 – 1.1090.
On the daily timeframe, the Euro’s downtrend looks to be continuing. Sellers need to get the price down below 1.1119 as quickly as possible. Any sharp upwards rebounds reduce the chances of my forecast being fulfilled.