On Monday the 18th of March, trading on the euro closed slightly up. During the European session, the bulls pushed the pair up to 1.1359 on the back of the weak US data released last week. The dollar partially recovered its losses in the US session and the EURUSD pair returned to the balance line.
Day’s news (GMT+3):
The bulls have shifted the upper boundary of the channel, but the pair’s dynamics followed my forecast for the most part. The price bounced from the balance line and the trend line (from 1.1176) to 1.1349. By close, the bulls had retreated back to the balance line.
A triangle formation has appeared on the H4 timeframe. Judging by the wave structure, this isn’t an ending diagonal. Most traders judge these price models by eye without looking at the internal wave structure. As such, the more defined the formation is, the bigger the influence it will have on the market.
Trader attention is shifting towards the Fed meeting. The US central bank’s meeting will begin today, and end with a press conference tomorrow. The regulator is expected to leave interest rates at their current levels and to downgrade their outlook. We’ll have to wait and see what kind of statements we get and what the reactions to them will be like.
From a technical standpoint, the pair is poised to decline from its current level. Considering the rebounds that occurred on the 14th and 18th of March, the bulls may try to use the rising euro crosses to trigger stop levels ahead of the meeting. I expect to see the pair rebound downwards from around 1.1360 – 1.1367 as traders cash in on their long positions. A breakout of the trend line at 1.1345 would increase pressure on the bulls. After such a breakout, we would have a target zone of 1.1318 – 1.1320. It remains to be seen whether we’ll reach the 45th degree.