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Euro/Dollar: Euro Back to LB

Hourly

Yesterday’s Trading:

On the whole I’m happy with how the euro/dollar has slid to the 90th degree. Due to the yen crosses, the maximum on my forecast wasn’t reached and the minimum was below the target.

On Tuesday the market ignored the weak US statistics. Market participants declined to open new positions before the FOMC meeting.

The August retail sales index in the US stood at 0.2% (forecasted: 0.4%, previous: 0.7%).

The August retail sales index for the US which doesn’t take car sales into account stood at 0.1% (forecasted: 0.3%, previous: 0.6%).

The New York Federal reserve’s September business activeness index was -14.7 (forecasted: -2.0 previous: -14.9).

Main news of the day:

  • At 11:30 EET, the UK is releasing labor market data for August (changes in the number of unemployment benefit receivers, unemployment level, changes in average wages and July job creation);
  • At 12:00 EET, the Eurozone August CPI will see the light of day;
  • At 15:30 EET, the US is publishing its August CPI;
  • At 17:00 EET, NAHB is publishing its US September index for the housing market;
  • At 23:00 EET, the US is releasing a report on securities purchases by foreign investors in July.

Market Expectations:

The Fed’s two-day meeting begins today and in it they will pore over whether to change the base rate for the US. The outcome will be made known on Thursday.

Trader attention in Europe will be focused on data coming out of the UK and in the evening it’s all about what is coming out of the US. Market volatility could boil over after UK labor market data is out.

Technical Analysis:

  • Intraday target maximum: 1.1331 (in the States), minimum: 1.1262 (current price in Asia), close: 1.1300;
  • Intraday volatility for last 10 weeks: 125 points (4 figures).

The euro/dollar has returned to the LB. If the euro grows in Asia, after a renewal of the maximum, I’ll be waiting for a rebound from Europe market opening, then a growth to 1.1331. I’m not writing off a complex troika – a recoil to the LB and a fall to 1.1230.

Daily

On Tuesday the euro/dollar closed down. On the daily the stochastic has switched downwards and formed a euro sales signal. As you know, fundamental news can turn any strong technical signal the opposite way. Without news we can use the signals, only take the release of important news into account. We’ll know whether this signal works or not tomorrow when the Fed announces its interest rate decision. Now to the Weekly.

Weekly

There’s much to say here for the moment.

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