On Tuesday the euro closed up, despite the rate repeatedly returning to 1.0565. By the end of the day, a V-shaped pattern had formed. Over the last few days a W-shaped pattern has formed. The dollar received support from American stats and a fall in oil.
In the secondary US GDP assessment for Q3, the figures were changed from 3.0% to 3.2%. The first assessment had a strong effect on the market and so the second assessment’s effect was a short-term one.
The data strengthened any optimism for the US economy and the chances of a rate rise by the Fed. According to data from Group FedWatch Tool, the likelihood of a rate hike in December has risen from 93.5% to 98.6%.
From a 1.0565 minimum the price bounced 85 points to 1.0654. Here the dollar couldn’t be helped by the US consumer confidence index, even though it exceeded expectations.
On Wednesday trader attention will be on the OPEC meeting in which the members should be concluding an agreement on a reduction in output. Here the media will need attention. Their headlines will set the direction of the price of oil and commodity currencies.
After yesterday’s strengthening of the euro, I expect the forming of a V-shaped pattern. I reckon that after the strong US data and before the NFP, the euro is unlikely to rise. By the opening of the US session I expect a test of 1.0607.
Day’s News (GMT+3):
Euro/ rate on the hourly. Source: TradingView dollar
Intraday forecast: minimum: 1.0608, maximum: 1.0660 (current Asian), close: 1.0638.
The expectations of a W-pattern forming came off. The only thing is that the sellers managed to return the rate to Monday’s minimum on the back of the US stats. From the 1.0565 minimum the pair restored to 67 degrees. I would really like to see a strengthening of the euro to 1.0694 today, but it seems to me that yesterday’s GDP data will keep the euro bulls back before the NFP. Due to this, On Wednesday I reckon we’ll see a V-shaped pattern with a minimum at 45 degrees (1.0607). The stochastic is down, so the V-shaped pattern could form mirroring my forecast.