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EUR/USD: lost its steam on the hourly


The euro closed Tuesday down. My idea of buying from the trend line at 1.1225 ended up a loss making one.  My stop loss took effect when the trend line – which took its beginnings from the 1.1123 minimum – broke. Due to a fall in the euro/pound to 0.8608 (-0.98%), the euro/dollar crumbled to 1.1191.

The dollar received support from falling oil prices and data from the US. Oil fell due to the announcement from the Saudi and Iranian oil ministers that the OPEC negotiations in Algeria are just consultative. One could say that no one intends to conclude an agreement on a freeze in output.

The US index for consumer confidence rose to a 9-year maximum of 104.1 against a forecasted 99.8 (previous: 101.8). Markit’s PMI in the service sector rose to 51.9 (forecasted: 51.1, previous: 51.0).

Market expectations:

The picture is rather contradictory. I want to go for a rise of the euro to 1.1230 on the hourly and a fall to 1.1130 on the daily. I’ve ended up going for the fall since the daily is more important than the hourly.

Tonight the Fed’s Yellen and the ECB’s Draghi are to speak. Due to this I’ve set my euro forecast at a weakened 1.1173. It’s unlikely they’ll have anything new to say, so I don’t expect to see any real price swings on the market. Any fall will be cancelled with a close of the hourly candle above 1.1230.

Day’s News (GMT+3):

  • 9:00, Swiss consumer indicator from UBS for August and Eurozone consumer climate from Gfk for September;
  • 10:00, Swiss economic barometer from KOF for September;
  • 11:05, BoE Shafik to speak;
  • 15:30, US durable goods’ orders in August;
  • 17:00, Fed’s Yellen to speak;
  • 17:10, FOMC’s Bullard to speak;
  • 17:30, ECB’s Draghi to speak, US oil reserves for week ending 24th September.

Technical Analysis:

Intraday forecast: minimum: 1.1173, maximum: 1.1220, close: 1.1190.

Euro/dollar rate on the hourly. Source: TradingView

On Tuesday the euro/dollar broke through the balance and trend lines. After a fall to the 67th degree, the euro corrected to 1.1226. The pair sat in a sideways for 11 hours, trading at 1.1211. I reckon that as soon as the oscillator stochastic returns to the sell zone, the euro will renew its downward movement. If the euro/pound cross breaks the 0.86 level, the fall of the EUR/USD will hasten. Due to a general strengthening of the dollar, the sellers could reach the 112th degree at 1.1147 in just 4 hours. Any fall will cancel with a close of the hourly above 1.1230.


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