No Strengthening Factors For Euro
Yesterday’s Trading: On Tuesday the euro was trading mixed against the USD due to a lack of important economic data. The battle went on around the LB at 1.1390. The euro didn’t make it to the 1.1345 calculated level. Due to oil going up, the rate managed to restore to 1.1409.
Market Expectations: The EUR/USD stopped by the trend line which passes through the 1.0821 (10/03/16) and 1.1216 (25/04/16) minimums. Taking into account the week’s pinbar and the falling star, I reckon the euro is to fall to 1.1250. The news is little. A spike of volatility on the currency market can be expected when the UK stats come out, with it due to affect the euro/pound cross. On Wednesday I expect to see the euro fall to 1.1315. Any sustained fall will be cancelled with a rise of the quotes above 1.1410.
Day’s News (EET): 11:30, UK industrial and manufacturing production data in March; 17:00, UK preliminary GDP from NIESR for April; 17:30, US oil reserve data for week ending 7th May; 19:30, ECB representative Nowotny to speak; 21:00, US federal budget balance for April.
Technical Analysis: The EUR/USD has been consolidating under the balance line for two days. The fall slowed near the trend line. Really, I should be looking at buying the euro from the trend line, but in my forecast I expect to see a fall. How so? I’m counting on seeing a pinbar coming off on the weekly time frame. We need some decisive factors to weigh in and force a close above 1.1609, thereby cancelling the pinbar signal. The sellers need to strengthen below 1.1350 and there it will be easier to shift downwards. A growth above 1.1409 will open the road to 1.1450.
EUR/USD Hourly Chart