Euro/dollar target: 1.0464

Previous:

On Wednesday the euro/dollar corrected to 1.0451. My expectations for yesterday rang true. The USD lost out throughout the market due to a fall in the yield of American bonds and a reduction in long positions before the holidays.

Market expectations:

As the Christmas holidays approach, trader activity falls with each day, and with it trading volumes. Due to low liquidity, we could see sharp and unpredictable fluctuations.

The euro is trading up against the dollar in Asia. The rate has risen to 1.0448. This morning reminds me of yesterday when the euro jumped to 1.0419 in Asia.

In my forecast I’m expecting a rise of the EUR/USD to 1.0464 (upper limit of the channel). Taking into account that the stochastic is facing downwards on the hourly, the growth should start from 1.0424. It’s likely that there will be a break in the trend line, just as on Wednesday, so don’t be in a rush to buy euro from this line. The sellers could put pressure on the price all the way to 1.0419. If it will be passed, any growth will be cancelled out.

Day’s News (GMT+3):

  • 10:00, German import prices for November;
  • 12:00, ECB economic bulletin;
  • 12:30, UK Q3 GDP;
  • 16:30, Canadian November CPI and October retail sales. US durable goods orders in November and definitive Q3 GDP for 2016, plus initial unemployment benefit applications for the week ending 17th December.
  • 17:00, US October housing price index;
  • 18:00, US base index for personal consumption expenditure in November, index for leading indicators from the CB for November.

Technical Analysis:

Euro/ rate on the hourly. Source: TradingView dollar

Intraday forecast: minimum: 1.0423 (current Asian), maximum: 1.0464, close: 1.0445.

The euro/dollar rose to 1.0451 during the American session. From here the price corrected to 1.0420. In Asia the bulls returned the rate to 1.0435. In my forecast I’ve set the target at 1.0464. I would like to see the rate rise to the upper limit of the channel. However, it’s no fact that the market will stick to my scenario. For the buyers there are two control levels: 1.0425 and 1.0419. A break in the first wouldn’t be so bad if the price quickly returns back. A close of the hourly below 1.0417 will cancel out the growth scenario. It will be better to use Buy Stop orders around the trend line at the maximum of the previous bar, rather than entering the market. Let the price worsen so that the risks aren’t high.

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