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Euro/Dollar: Expected Continuation of Consolidation

Hourly

Yesterday’s Trading:

On Wednesday the euro/dollar reached 1.1213 as part of a saw-like pattern. The euro/dollar was up since the ECB’s Mario Draghi didn’t mention a word about the extension of QE. He made a speech in the European parliament, saying that the bank could alter the size, makeup and length of the QE program.

The euro/dollar rose to 1.1213 and is trading at 1.1189 according to latest quotes. The rally peaked at the 90th degree.

Main news of the day:

  • At 11:00 EET, Germany’s IFO indices for current conditions, expectations and business climate for September are out;
  • At 11:30 EET, the UK is publishing August mortgage approvals from BBA data;
  • At 15:30 EET, the US is publishing its initial unemployment benefit application numbers and durable goods orders for August;
  • At 17:00 EET will be the sales setup for August;
  • At 00:00 EET, the Fed’s Yellen will give a speech.

Market Expectations:

On Thursday I’m more inclined to go for a consolidation near the LB.

Technical Analysis:

  • Intraday target maximum: 1.1215 (Europe), minimum: 1.1145 (USA), close: 1.1175;
  • Intraday volatility for last 10 weeks: 125 points (4 figures).

On the daily graph, the euro/dollar is still trading in a sideways trend between 1.1086 and 1.1459. An upward correction from a 1.1104 minimum is developing. Taking into account that the euro/pound cross has returned to the MA and is trading at the U3, the euro/dollar is likely to be under pressure due to a downward correction in addition to the pound/dollar correcting itself.

Daily

The euro/dollar didn’t quite reach 3rd September’s minimum of 1.1086. The price has ricocheted from the LB. A correction is forming on the hourly. It’s probable that today will see the euro continuing its consolidation at 1.1160. The interim target is still 1.1086, with the next at 1.10. Now to the Weekly.

Weekly

The euro/dollar has rebounded from 1.1100 and is still trading in a sideways trend between 1.1086 and 1.1459. After a break in 1.1086, a pinbar will start to come off.

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