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EUR/USD: Europe against Asia


On Friday, 20th January in Washington, Donald Trump was inaugurated as the 45th president of the USA. The euro restored from a minimum of 1.0625 to 1.0709. In his speech Trump promised to make changes to economic and national security. The euro rose with the growth in American bonds, although the currency should have fallen.

Market expectations:

On Monday in Asia the euro rose to 1.0750 due to a fall in American bond yields. According to the latest data from myfxbooks, the split between long/short is 72%/27% or 10883/4113 lots. If we take into account that the stops for intraday trades are around 30-60 points on average, then we may well see a bounce at around 1.0760/70.

Since today is Monday, trading in New York closed up for the euro and in Asia the growth continued, so I expect to see a downward correction to around 1.0702.

Day’s news (GMT+3):

  • 14:00, German Bundesbank monthly report;
  • 14:30, ECB’s Draghi to speak;
  • 16:15, ECB’s Pratt to speak;
  • 16:30, Canadian wholesale sales in November;
  • 18:00, Eurozone January consumer confidence index.

Technical analysis:

Euro/ rate on the hourly. Source: TradingView dollar

Intraday forecast: minimum: 1.0649, maximum 1.0758 (current Asian at opening), close: 1.0714.

My Friday’s expectations came off in full. The euro fell in the first half of the day and rose in the second. As I wrote above, the euro has been rising in Asia against the dollar due to a fall in American bond yields.

From a minimum of 1.0625, the price has restored by around 112 degrees. Since the buyers’ share of the market is 72%, I think the market will drag the rate to around 1.0755/60.

Today is Monday. In my forecast I’ve gone for a reverse movement against the last two sessions (US and Asia). As I see it: the euro will fall until the middle of Tuesday. For today the price level is at around the 45th degree. On Tuesday we could see a test of the 67th degree. Later we’ll need to take a look at the situation. We also need to keep an eye on the euro/pound cross which could hold the euro from falling against the dollar if it rises. If this happens then the pound will cheapen against the dollar faster than the euro.


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