On Monday, trading on the euro closed slightly down. Despite this fall to 1.0620, the eurobulls managed to partially recover their losses.
The single currency fell against the dollar after a statement from ECB representative Ewald Novotny. He noted that Brexit may lead to some significant problems, as well as announcing the ECB's intention to discuss curtailing their QE program until Autumn. In the American session, the rate restored to 1.0709.
Mario Draghi, head of the ECB, is to speak this afternoon, and the Eurozone is set to publish its preliminary GDP data for Q4. Draghi's speech is expected to have a strong influence following the ECB's statement at yesterday's press conference. His other statements have had little effect on currency markets, however.
Today (Tuesday) a two-day meeting of the FOMC begins in the US. They are expected to maintain current interest rates. This news is important for the market, but is unlikely to significantly affect it.
After yesterday's rebound from a minimum of 1.0620, a daily hammer formed. The apparent break in the trend line turned out to be false. Taking this into account, for Tuesday I'm forecasting a fall to around 1.0661, followed by growth up to 1.0740.
Day's news (GMT+3):
EURUSD rate on the hourly. Source: TradingView
Intraday forecast: low: 1.0662, high: 1.0740, close: 1.0710
Mr. Ewald Novotny pushed the euro almost as far as the 112th degree. The rebound by 67 degrees on the daily timeframe led to the formation of a reversal hammer. Given that on Monday I was predicting a two-day weakening of the euro against the American dollar; after the hammer, and the false break of the trend line, I'm expecting the price to restore to 1.0740
This morning I envisaged three main potential scenarios:
1. Euro slide to 1.0634, followed by a rebound to 1.0710;
2. Euro growth to 1.0740, followed by a slide to 1.0690;
3. Correction to the 45th degree, followed by a surge in the rate to 1.0740.
From these choices, I've gone with the 3rd. Now, given these possible scenarios, it's necessary to determine the orders to trade the EURUSD pair.