On Thursday the 2nd of November, trading on the euro/dollar pair closed up. Euro bulls got some unexpected support as sellers shorted the pound following the Bank of England’s meeting. The pound shed 163 pips against the euro to reach 0.8939, while dropping 227 pips against the US dollar to hit 1.3043. The euro rose against the dollar to 1.1687, returning to around 1.1658 by the end of the day.
Neither the details of the planned tax reform legislation nor Janet Yellen’s successor being named brought much optimism to the market. President Trump has nominated Jerome Powell to head the Federal Reserve. Markets were expecting this so the reaction was muted.
Day’s news (GMT+3):
Fig 1. EURUSD rate on the hourly. Source: TradingView
Thursday was volatile for the single currency. Buyers met with resistance at the 67th degree during the US session. The price is still trading inside an upwards channel with a 72-pip range.
We can expect similar volatility in today’s US session once the NFP report comes out. I don’t make forecasts on payrolls day, so there’s no projection on the graph.
The price is currently trading 23 pips away from the LB balance line. I think that the price will have returned to this line by the time the NFP report comes out. The euro has closed below 1.1600 for the last few days. The head and shoulders model on the daily timeframe and the targets relating to it are still in play.