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EURUSD: euro expected to continue its decline


On Thursday the 19th of April, trading on the euro closed down. The single currency slid against the dollar from 1.2400 to 1.2345. The local minimum is at 1.2329. Additionally, the greenback got a boost from a rise in US10Y bond yields, which have jumped from 2.86% to 2.934%.

Aside from the dollar’s universal rise, the euro was also pressured by a declining pound following BoE governor Mark Carney’s speech. He said that he didn’t want to get “too focused on the precise timing” of the next interest rate rise owing to recent mixed fundamental economic data. The single currency has also gained support through the EURGBP cross, but since this pair is moving in only one direction, the pound is going to drag the euro down with it.

US data:

  • Leading economic index (Mar): 0.3% (forecast: 0.3%, previous: 0.7%).
  • Initial jobless claims: 232,000 (forecast: 230,000, previous: 233,000).
  • Philadelphia Fed manufacturing survey: 23.2 (forecast: 20.8, previous: 22.3).

Day’s news (GMT+3):

  • 09:00 Germany: PPI (Mar).
  • 14:30 Germany: German Buba President Weidmann speech.
  • 15:30 Canada: CPI (Mar), retail sales (Mar).
  • 16:40 USA: Fed’s Evans speech.
  • 17:00 Eurozone: consumer confidence (Apr).
  • 18:15 USA: FOMC member Williams’ speech.
  • 20:00 USA: Baker Hughes US oil rig count.

Fig 1. EURUSD hourly chart. Source: TradingView

In the US session, sellers broke the trend line at 1.2360. From 1.24, the rate dropped to 1.2329 without going any lower. This drop was the result of the sharp upwards reversal on the EURGBP cross. I’ve already stated above why the pound is declining.

The price on our main pair has been consolidating around 1.2340 for the last 15 hours. Considering that the dollar is trading up against all the majors in today’s Asian session, our pair is set to hit a new daily low. I think this will happen at some point during the US session. There aren’t any important news releases in Europe today. For Friday, my target is 1.2305 (ideally 1.2290).

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