Due to the weakening of the euro against the UK pound on Friday, the euro/dollar dropped to 1.1216. Judging by the demand for the pound, the approaching UK referendum on the Brexit isn’t causing alarm amongst market participants. The referendum and the weak Eurozone data are pushing the euro down against the USD.
Today is Monday; a day where I ignore the news and always look for a movement of the rate against Friday. The euro fell on Friday, meaning today I expect it to strengthen. Since the oscillator stochastic is in the sell zone, from trade opening in Europe it’s likely that there will be a shift to 1.1220. A sharp fall in the euro will mean that the same pinbar for the day that we saw on Thursday is to form once again. The target on this is 1.1145.
Day’s News (EET):
Today is a holiday in Australia and New Zealand with the markets closed there;
11:00, German business optimism index from the IFO, indicator assessing the current situation and the index for economic expectations in April;
13:00, UK report for industrial orders in April;
17:00, US new housing sales in March.
The euro has fallen by 1.6% over the course of 2 days. The MA line has turned downwards. The price is under the LB. Taking into account the minimum daily pinbar (1.1268) is broken, now we should count on a correction and sell euro. A growth in the pair above 1.1282 is unwanted since it will cast doubt over the pinbar coming off.
Since on Mondays I always look at movements against that of Friday, my target is at 1.1268 (45th degree) and a close of the day at around 1.1245. After a correction to the LB, on Tuesday we can consider a fall in the rate below 1.12.