The euro/dollar closed slightly up on Monday. During trades in the States the pair dropped to 1.1158 on data regarding personal consumption expenditure. In shifting the minimum, the price returned to 1.1193. The reaction to the stats was weak since the UK was having a bank holiday. Trader activity was low.
There’s no important macro data planned to be released today. All traders will be focussed on the US labour market data from Friday. The euro is trading down in Asia by 0.14% against Monday’s closing price. Going off the hourly indicators, the pair is ready to restore itself to 1.1210. Graphical analysis is indicating a weakening of the euro. Since my yesterday’s expectations of movement against that of Friday did not ring true, today I am again looking at the pair heading to the LB at 1.1210.
Day’s News (EET):
Intraday forecast: minimum: 1.1168 (current Asian), maximum: 1.1210, close: 1.1193.
Euro/dollar rate on the hourly. Source: TradingView
Without the Brits, the sellers managed to shift the euro to the 157th degree. On Tuesday I expect to see a rise of the euro to 1.1211. The bull divergence on the AO indicator and the buy signal forming on the oscillator stochastic are in favour of a euro strengthening.
Since the MA line is on its way down, the oscillator’s signal could be a false one. We need to wait for a break in the 1.1185- 1.1195 zone. As soon as this zone is passed, we can look at a strengthening of the euro as part of a W-shaped pattern.
I’ve also considered the forming of a double bottom since the current movements do not suit a saw-like fall. If a double bottom forms, the price should return to 1.1158 and bounce sharply to 1.1180. Without any risk of a rebound, the euro/dollar will fall to 1.1129.