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Euro/Dollar Bull Takeover on Daily

Hourly

Yesterday’s Trading:

The euro/dollar’s 5-day growth has ground to a halt. Trading in Europe saw the euro down due to the ECB’s Ewald Nowotny sticking his oar in and then the US stats came out in the evening which added to the fall. Nowotny suggested that the ECB should adopt additional measures to aid inflation growth.

The US’ CPI for September was down slightly on August, but it remained unchanged when expressed annually. The labor market data turned out better than expected.

The number of initial unemployment benefit applications in the US the week ending 10th October stood at 255,000 (forecasted: 270k, previous: 262k).

The September CPI for the country was -0.2% MoM and 0.0% YoY (forecasted: -0.2% MoM and -0.1% YoY, previous: -0.1% MoM and 0.2% YoY). The index without energy and food for the month stood at 0.2% (forecasted: 0.1%, previous: 0.1%).

The New York Federal Reserve October business activity index was -11.4 (forecasted: -7.4, previous: -14.7).

Main news of the day:

  • At 09:35 EET, the BoJ’s Kuroda will speak;
  • At 12:00 EET, the Eurozone is publishing September CPI data and August balance of trade numbers;
  • At 14:30 EET, the ECB’s Benoît Cœuré is set to speak;
  • At 17:00 EET, the Reuters/Michigan consumer sentiment index and the NAHB housing market index for October will be out;
  • At 23:00, the US will let us know about purchases of long-term securities purchases by foreign investors in August.

Market Expectations:

The daily candle for Thursday has covered Wednesday’s candle. Due to this, the euro’s fall could continue with even more gusto. Look at how the situation developed on the market after 18th September of this year.

Technical Analysis:

  • Intraday target maximum: 1.1415, minimum: 1.1330, close: 1.1350;
  • Intraday volatility for last 10 weeks: 121 points (4 figures).

The euro/dollar has fallen from a 1.1494 maximum by 112 degrees. The euro has stopped by the trend line. Taking the candle formation on the daily into account, there’s reason to suspect that it will be broken after a rebound and the euro’s demise hastens. We could see the rate back to 1.1280 by 19th October.

EUR/USD Hourly Graph

Daily

The ECB’s Ewald Nowotny stopped the euro dead in its tracks near the resistance. The upper limit of the resistance zone crosses through 1.1535. Thursday’s candle swallowed up Wednesday’s. I’ve marked out two similar parts on the graph. If the eurobears begin to pull off this pattern, we’ll need to wait for a return of the euro to 1.1280. Now to the Weekly.

EUR/USD Daily Graph

Weekly

On Wednesday the euro left the 1.1086-1.1459 range and on Thursday it closed around 1.1370. An upturned pattern has formed on the daily. If the week closes with a pinbar, we’ll be waiting for a fall to 1.1280 and below.

EUR/USD Weekly Graph

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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