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Expected Movement Against Friday

Yesterday’s Trading:

On Friday the euro weakened against the dollar after Yellen spoke. The Fed chief hinted that the interest rates will be put up in the coming months. According to data from CME Group FedWatch, futures for the rate’s likelihood of being increased in June didn’t change on Friday; remaining at 28%. However, for July this increased to 61%. By trading close, the euro/dollar renewed its month’s minimum, dropping to 1.1109. In Asia the euro fell to 1.1097.

Market Expectations:

In Asia the euro fell to 1.1097. Today is a day off in the US and UK. The economic calendar is empty. Traditionally, on Mondays my forecast goes against Friday. If on Friday there was a one-directional fall, on Monday I’m looking at it doing the opposite. If there was a flat, I’d be saying we’re sitting along the trend today.

On Friday the support for the euro was at 1.1130. This level is a target region. If the sellers manage to hold the buyers back at this level, this means that we are readying for a test of 1.1080. I recommend looking at the month’s candle. With such a bear candle, we set to quickly return to 1.0830.

Day’s News (EET):

  • US and UK day off;
  • 15:00, German preliminary CPI data;
  • 15:30, Canadian Q1 balance of payments and April PMI.

Technical Analysis:

Intraday forecast: minimum: 1.1095, maximum: 1.1132, close: 1.1121.

Euro/dollar rate on the hourly. Source: TradingView

Friday’s expectations didn’t come off. The buyers started to leave long positions before Yellen spoke. I warned that due to her speaking it wouldn’t be worth relying on technical signals. The news is causing movement on the currency market. Technical analysis will allow us to find the ideal points of entry and exit, with the stops preserving our deposit.

The euro/dollar stopped at the 90th degree. The euro loves to disappoint from the 112-135 zone. This means that it’s pretty likely we’ll see a test of 1.1084. The pair is consolidating at 1.11 for the moment. The previous three candles indicate a strengthening of the euro as part of a correction.

There’s no significant news out on Monday. It’s a day off in the US and UK. Due to the holidays, price fluctuations could be less than 40 points (expected range of daily candle).

If the sellers start to fix profit on short positions and the bulls try to strengthen above 1.1132, we won’t be able to avoid a restoral of the quotes to the 45th degree at 1.1150.

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