On Wednesday the 5th of September, trading on the euro closed up. Market volatility was high during both the European and US sessions. At the beginning of the European session, the single currency dropped against the dollar from 1.1608 to 1.1543. In the US session, the euro bulls pushed the session high up from 1.1608 to 1.1640.
The greenback came under pressure from a rising pound, which occurred on the back of a Bloomberg report that the UK and Germany have decided to give up certain demands, which should make it easier for the sides to reach a deal. This unexpected piece of news fits in with my market expectations, although I haven’t accounted for volatility.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart.
Now let’s look at the hourly chart. While the pair has deviated from my weekly projection, I haven’t removed it from the chart because the rate has now returned to its projected level on the hourly cycles. I’ve double-checked the cycles and nothing has changed. The pair just strayed from the weekly projection for a bit.
Given yesterday’s pricing model, I’m prepared to entertain the possibility of a double top formation, although the general technical picture suggests a jump to the 67th degree. 1.1605 will act as a support today. The market has been swinging for the last few days, so don’t expect volatility to subside and be ready to see some full retracements of previous movements. I don’t really have any trading ideas to apply to my forecast. I think that today, everyone will be preparing for tomorrow’s nonfarm payrolls report.