On Friday the 29th of June, the euro surged against the US dollar. Demand for the euro increased after the news that EU leaders reached an agreement on migration. The single currency also enjoyed support from positive Eurozone data along with the general decline of the greenback. The EURUSD pair closed the day at 1.1682, marking a rise of 0.99%.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
Trading on the euro opened down on Monday after the US dollar made some gains across the board. In addition to the dollar, the euro crosses are also now piling pressure on the single currency. This pressure is mostly the result of political turmoil.
This time, traders have reacted negatively to a publication from Rheinische Post, which reported that the German CDU and CSU parties are planning to hold another meeting to discuss the migration deal reached on Friday. Clearly, someone isn’t happy with the current policy.
In Asia, the euro has dropped from 1.1690 to 1.1637 (-53 pips). Friday closed with a wedge, and the price moved out of it early this morning. It would have been too late to open a short position from the 135th degree before the weekend, and as of this morning the pair is already trading at 1.1655.
The downwards correction from the high of 1.1690 came to 45 degrees. I think that this downwards movement will continue after a slight pullback. If we catch the Fibo levels on the downwards wave from 1.1690 to 1.1637, we can think about selling from around 1.1657 – 1.1665 (38.2 – 50%).
On the current hour (9:00 GMT+3), the trend line and balance line are intersecting at 1.1615. Today, they’re acting as supports. I’m expecting a breakout of the trend line at 1.1633 at around 18:00 (GMT+3). Today is Monday, so this drop could be in response to Friday’s movements and it could continue until the end of the US session.