Trading on the euro/dollar pair closed slightly up on Wednesday. The rate fell to 1.1312 during the European session on comments from ECB board member Benoît Cœuré. Another contributing factor to the euro’s slide was the collapse in oil prices. This, in turn, weighed down on commodity currencies.
The market got shaken up a bit as the FOMC minutes were published for their June meeting, but the dollar failed to hold on to its gains. By the end of the day, the rate had recovered to 1.1354.
Day’s news (GMT+3):
EURUSD rate on the hourly. Source: TradingView.
On Wednesday, after falling to 1.1312, the euro/dollar ricocheted up to 1.1355. The 112th degree subdued sellers. Up above, the LB balance line is stopping buyers.
The market is ready for a fall again. The price has rebounded from the LB. At the time of writing this review, the euro is trading for 1.1339 USD. This morning, I entertained the possibility of the euro falling to 1.1290, but remembering yesterday’s rebound to 1.1335, I changed my mind. It was too big a rebound for there to be a further slide. Now, there’s a chance to create a bullish divergence on the AO indicator and move to 1.1365 (45th degree and trend line). If the price rebounds from the 45th degree and falls to 1.1330 on Friday, we can expect the euro to fall to 1.1280.
Today, I’m expecting a slide to 1.1320, followed by growth to 1.1365. I’m not ruling out a return to 1.1312 and the formation of a double base. A drop to 1.1312 isn’t ideal for sellers because if this forms a reversal model, the price will rise to 1.1390.