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Euro/Dollar: Euro Pressure Could Increase

Hourly

Yesterday’s Trading:

On Monday the USD grew against the euro. The eurobulls took note of the technical factors and ignored the strong industrial production data from the Eurozone.

The euro/dollar rolled back to the LB after a break in the trend at 1.1325. From here the rate rebounded and is currently trading at 1.1327. Taking into account that the LB is moving upwards, the price didn’t stray too far from it.

Main news of the day:

  • At 11:30 EET, the UK is publishing its August CPI, PMI, RPI and its core output for the month;
  • At 12:00 EET, Germany is September releasing it business climate index from ZEW, along with its July balance of trade;
  • At 15:30 EET, the USA will see data released on August retail sales and business activity in the manufacturing sector from the New York Fed;
  • At 16:15 EET, the US will release data on changes in industrial production volume for August.

Market Expectations:

Trader’s attention is still focused on the upcoming FOMC meeting. If the ambiguous US reports and instability of the stock markets force the US Fed to delay a rate rise, the euro/dollar will continue its upward correction.

Today the ZEW report on Germany and the Eurozone will be published, with inflation data from the UK out, as well as US data on retail sales and industrial production. The UK stats are more important than those of the Eurozone. If the inflation indicator turns out less than forecasted, this will cause sales of the pound in the crosses, including that of the euro/pound. In this case the euro will receive a temporary support from the cross and then will also fall. If the data turns out good, in the first half of the day you can expect to see the euro strengthening against the dollar.

Technical Analysis:

  • Intraday target maximum: 1.1354 (in Europe), 1.1282 (in the States), close: 1.1305;
  • Intraday volatility for last 10 weeks: 125 points (4 figures).

The euro/dollar is trading by the second trend line and the LB. From Europe opening I’m waiting for a growth to 1.1345-1.1354 and then a break in the trend and a fall to 1.1282.

Daily

The euro/dollar renewed to 1.1372. There’s still a little bear candle about and the stochastic will form a signal to give the green light for euro sales. The bulls have control of the market at the moment and could update the maximum if the US data comes out weak. Now to the Weekly.

Weekly

There’s much to say here.

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