Euro trading on Tuesday finished down. The euro/dollar fell during the American session to 1.0970. The euro lost against the dollar and pound. The pound strengthened after the publication of inflation data from the UK which exceeded expected levels and lowered the need for the country’s central bank to drop their interest rate. Speculators are also trying their hand on rumours that the UK parliament might vote against leaving the EU. As a result, the euro was under pressure from the cross.
The euro/dollar on the hourly is in a correctional phase. 1.0974 is a good support. Taking into account that bullish signals are forming on the old time frames, in my forecast I’ve gone for a revival of the price to 1.1022. Since many traders have long positions, the fall of the pair could reach 1.0962. Here we need to keep an eye on all cross pairs. If the euro isn’t being sold in them, 1.0974 should hold out.
Day’s News (GMT+3):
Intraday forecast: minimum: 1.0975, maximum: 1.1022, close: 1.1010.
Euro/dollar rate on the hourly. Source: TradingView
The euro dropped to 1.0970 during the European session without updating the maximum. As I said above, the euro is under pressure from the euro/pound cross after the publication of UK inflation data. Market participants are also biting their nails before tomorrow’s ECB meeting and Mario Draghi speaking. They have no clue what decision the regulator will take with regards to QE.
I’m more inclined to use the 4-hour and daily graphs in the current situation. The indicators on these time frames are starting to signal a strengthening of the euro. Pay attention to the fact that I have two scenarios. I don’t know whether there will be a piercing of the lower limit of channel 2. Although the old time frames are indicating a turnaround for the euro, the hourly indicators are for a fall of the euro. Also don’t forget that long/short at the moment is 78/22. There are too many traders to lift it. As such, at the moment we’re likely to see a fall in the rate, maybe even an update of 17/10/16’s minimum and then we should rise. Draghi could fell correct the price pattern on Thursday to where we need it to be.