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EUR/USD: squeezed into a triangle


I didn’t bother with an intraday forecast on Friday and I was right not to do so. There was no chance I would’ve been able to correctly forecast the euro’s movements since the European stock market shook things up.

Deutsche Bank shares lost 9% (9.89 euros) from trade opening in Europe. The euro/dollar dropped with it to 1.1153. Then the share price rocketed 18.20% to 11.69 euros. Deutsche Bank’s share price rose due to rumours that to settle the case between the US state and the bank could cost $5.4 billion and not $14 billion, as was earlier thought.

The euro/dollar rose from 1.1153 to 1.1251. As a result, a pinbar formed on the daily which was indicating a further strengthening of the euro.

Market expectations:

We have a V-shaped pattern on the hourly and a pinbar on the daily. Traditionally on Mondays I wait for a movement against that of Friday.

Last Friday there was no one-sided movement and so my tactic today may not pay off. A triangle has formed on the hourly and from here I expect to see a rise out of it, with a subsequent fall to 1.1217. I’m not paying any attention to the news today. Make sure you keep an eye on Deutsche Bank shares because sharp price fluctuations will be followed by movements for the euro.

Day’s News (GMT+3):

  • 10:15, Swiss August retail sales. Spanish PMI in manufacturing sector throughout September;
  • 10:30, Swiss PMI for September from SVME;
  • 10:45, Italian PMI for September;
  • 10:50,  French PMI for September;
  • 10:55, German PMI for September;
  • 11:00, Eurozone PMI for September;
  • 11:30, BoE minutes on monetary policy and UK PMI for September;
  • 16:30, Canadian PMI from RBC for September;
  • 16:45, US September PMI;
  • 17:00, US construction expenditure in August, employment index in manufacturing sector form ISD, ISM’s PMIs in September.

Technical Analysis:

Intraday forecast: minimum: 1.1217, maximum: 1.1262, close: 1.1228.

Euro/dollar rate on the hourly. Source: TradingView

A pinbar formed on Friday. I expect it to come off on Tuesday.

From the 1.1251 peak, a triangle formed. From here the price could head upwards, following the previous impulse. Since today is Monday (correction day), after a rise to 1.1262, I expect a bounce to 1.1217 at the LB. I’ve nothing more to add to this.


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