On Monday the euro/dollar was trading in a range of 50 points due to a bare economic calendar and it being a state holiday in Canada and the US. The market formed a resistance at 1.1176 yesterday and today in Asia the eurobulls broke it. Purchases of the euro have resumed after Japan published Q2 GDP data.
Main news of the day:
- At 09:00 EET, Germany will release its June balance of trade figures;
- At 12:00 EET, revised Eurozone GDP for Q2 will be released.
German trade balance values are out, along with a revised Eurozone GDP. The economic calendar for this evening is empty.
- Intraday target maximum: 1.1263 (in Europe), 1.1152 (Asian), close: 1.1205;
- Intraday volatility for last 10 weeks: 130 points (4 figures).
The euro is up to 1.1217 against the dollar. Since Friday’s maximum of 1.1188 has been exceeded, all that can be considered is a further strengthening of the euro to the U3 at 1.1265 along the channel (the black line). The 112th degree goes through 1.1253. In the 1.1253 – 1.1265 zone, growth could stop. Since the evening’s calendar is bare, I expect the pair to correct to the U1 on the American session. It would be better if the euro corrected itself to the LB. The euro is trying to win back Thursday’s losses that were incurred during Draghi’s speech.
I made a channel with the grey lines. There’s no reason why correctional movement to 1.1245 isn’t on the cards, but not above it. If the day closes above 1.1245, the eurobulls will shift back to the trend line. This is somewhere around 1.1320. After such growth, forget about a fall until 16-17 September when the Fed is due to convene. We will see how the American markets open after the holiday. Now to the Weekly.
The euro is trying to break from the daily LB. The situation at the moment hasn’t really changed after a growth to 1.1218. A close of the week above 1.1332 would cancel the pinbar signal with a 1.1712 maximum.