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Euro/Dollar: Readying for Fall to 1.10

Hourly

Yesterday’s Trading:

On Tuesday there was no real news about the euro. Due to a fall in the euro/pound cross and a general fall in the dollar rate, the euro/dollar was yo-yoing. The fluctuations in one direction were from 50 to 70 points.

Main news of the day:

  • At 10:30 EET, the UK is releasing its July manufacturing production values, industrial production values and trade balance;
  • At 11:00 EET, the RBA’s assistant governor, G. Debelle, will give a speech;
  • At 15:15 EET, Canada is releasing data on August foundation laying for housing and at 15:30 EET will let us know how many construction permits were issued in the country in July;
  • At 17:00 EET, the UK is releasing its revised GDP assessment for Q3 from NIESR. This will take place simultaneously with the Bank of Canada making known its decision on interest rates and its representatives giving an accompanying speech;
  • At 17:00 EET, the US is releasing its job vacancy level and labor turnover for July.

Market Expectations:

In Asia the euro/dollar returned to the LB due to a growth in the Chinese indices and an increase in risk taking. Just as yesterday, there’s no planned news for the euro today. Taking into account that the euro is in the third day of a correctional phase, I’m starting to think that there’ll be a fall against the US dollar. I reckon that the euro/dollar will set the tone for the euro/pound today after the release of UK industrial manufacturing data.

Technical Analysis:

  • Intraday target maximum: 1.1215 (Asian), 1.1109 (in US – 90 degrees), close: 1.1135;
  • Intraday volatility for last 10 weeks: 130 points (4 figures).

The euro/dollar has returned to the LB from a 1.1215 maximum. The rebound was 45 degrees. We have an upward channel. Since the AC indicators and the stochastic are facing downwards and the AO is facing upwards, in the first half of the day I expect the euro to grow to 1.12 and then fall on the American session to 1.1109. There’s another option though: a flat around the LB until the Bank of England convenes.

GBP/USD Hourly Graph

Daily

Yesterday I made a price channel on the graph. Today I have highlighted this channel with black lines. The eurobulls didn’t manage to strengthen above 1.1245, so I’ll take a risk in saying that there’ll be a retreat in the rate and a fall of the euro to 1.10 before the week’s end. Now to the Weekly.

GBP/USD Daily Graph

Weekly

The euro/dollar is consolidating. The last weekly candles look like a doji. This means I’m looking at a fall for the euro. A close of the week above 1.1332 will cancel the pinbar signal from a 1.1712 maximum.

GBP/USD Weekly Graph

09 September, 09:16 (GMT+3)
Pound/Dollar: Corrected Well, Could Fall

Attention:

Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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