Euro/dollar could shift to 1.1140

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Expectations of a bottoming out yesterday came off in full. The GBP corrected before the Bank of England convened. Due to a rise in the euro/pound, the euro/dollar rose to 1.1119.

Market Expectations:

The euro continued to rise in Asia 17 points against the dollar. It would be better for the pair to consolidate than to try and rise during the Asian session. A fright may be caused due to a possible euro weakening against the dollar from trade opening.

The key event of today is the BoE meeting. If the Bank leaves the interest rate at 0.5%, the pound could strengthen against the dollar to 1.3480. The euro/pound cross will flip upside down, with the euro/dollar likely to fall. As per my forecast, I expect to see a rise in the pair to 1.1140. I’ve marked out two important levels as supports 1.1085 (LB at 11:00 EET) and 1.1066 (45 degrees).

Day’s News (EET):

• 14:00, BoE interest rate decision (and votes for which) and asset purchasing program;
• 15:30, Canadian primary housing market index for May. US June producer price index and unemployment benefit applications for the week ending 9^th July;
• 18:15, FOMC member Lockhart to speak;
• 20:15, FOMC member George to speak.

Technical Analysis:

Intraday forecast: minimum: 1.1088 (current Asian), maximum: 1.1140, close: 1.1128.

Euro/dollar rate on the hourly. Source: TradingView

In European trades on Wednesday, the euro/dollar updated the minimum and restored 67 degrees to 1.1119 from 1.1041. The price is situated above the LB. The MA lines are set upwards. In line with my forecast, I reckon we’ll see a rise in the EURUSD to 1.1140, but I expect a break to 1.12.

The hourly indicators (AO, CCI and stochastic) aren’t set up right for a strengthening of the euro. This means that the flat on the pair could stretch all the way to 14:00 EET.