Due to a restoral of oil prices and a weakening of the USD, the euro/dollar on Monday lifted to 1.1331. Trades ended at 1.1312. The oil market pretty much fully found a way to win back the morning’s losses following OPEC’s failed meeting in Doha. A rise in the price of oil was made possible by worker strikes in the oil industry in Kuwait. 13,000 people are protesting against a reduction in wages and social benefits. Kuwaiti oil production fell by 1.7 million barrels per day to 1.1 million barrels.
The euro/dollar in Asia is trading at 1.1322. The euro is strengthening against the Japanese yen and falling against the GBP. Therefore the sterling in its pair with the dollar is pushing the euro up.
As part of an upward price channel, I wouldn’t count out a rise of the euro/dollar rate to 1.1350. I reckon the euro will weaken from 1.1340 and the 90th degree, although this level won’t be the key resistance. The euro often disappoints from the 112-135 degree zones. At the moment, the 112th degree runs through 1.1365.
Of today’s news, it’s worth circling the speeches of the three governors: Stevens, Carney and Poloz. Only they know what they are going to say so trying to take their speeches into account in a forecast is useless.
Day’s News (EET):
11:00, Eurozone balance of payments in February;
12:00, German and Eurozone ZEW April economic sentiment indices;
15:30, US construction permits issued and foundations lain in March;
16:30, RBA governor Glen Stevens to speak;
17:35, BoE governor Carney to speak;
18:00, BoC governor Poloz to speak.
For three trading days the euro/dollar has corrected 38.2% to the downward 1.1464 – 1.1233 wave. The 50% level runs through 1.1348. I think we’ll see a return of the price to the LB from 1.1340/45. The support passes through 1.1295 in Europe and 1.1300 in the US.