• Forex
  • Investments
  • Loyalty program
  • Promotions and contests
  • Analysis
  • Getting started
  • About us

EURUSD: the pair has gained a foothold above the balance line


On Tuesday the 2nd of October, trading on the EURUSD pair closed down. In the US session, buyers recovered a big portion of the losses they incurred during trading in Europe. The euro is under pressure from the situation in Italy, where the government has approved a budget deficit of 2.4% for 2019. Italian Deputy Prime Minister Luigi Di Maio gave markets some respite after saying that the government has no plans to leave the EU.

Fed Chair Jerome Powell’s speech didn’t didn’t spark any serious volatility. The euro recovered to 1.1570, after which the EURUSD pair went into a correctional phase, where it has been for the last 9 hours.

Day’s news (GMT+3):

  • 10:15 Spain: Markit services PMI (Sep).
  • 10:45 Italy: Markit services PMI (Sep).
  • 10:50 France: Markit services PMI (Sep).
  • 10:55 Germany: Markit services PMI (Sep).
  • 11:00 Eurozone: Markit services PMI (Sep).
  • 11:30 UK: Markit services PMI (Sep).
  • 12:00 Eurozone: retail sales (Aug).
  • 15:00 US: ADP employment change (Sep).
  • 16:45 US: Markit services PMI (Sep).
  • 17:00 US: ISM non-manufacturing PMI (Sep)
  • 17:30 US: EIA crude oil stocks change (28 Sep).

Fig 1. EURUSD hourly chart.

Current situation:

The fundamentals overpowered technical factors, which took me by surprise. Nevertheless, the bulls were able to recover their losses in the US, and further strengthened their positions in Asia.

The euro surged on the news that Italy plans to reduce its budget deficit to 2% in 2021. The news isn’t that great, because it’s still 2018. It’s easy to make promises now, and not fulfil them later.

From the 1.1505 low, the euro recovered by 67 degrees. From a technical standpoint, there’s nothing stopping this correction continuing to 1.1613 (90 degrees). There’s a resistance at this level, which is drawn from the highs of 1.1630 and 1.1625.

If today doesn’t give us any negative news about Brexit or the Italian budget, then we could see quotes rise to 1.1650 ahead of Friday’s payrolls.

From today’s US data, it’s worth paying attention to the ADP employment report, and the PMI data from Markit and ISM. The former is important for traders in order to revise their positions ahead of the NFP report. The PMI reports are important for the Federal Reserve.

I wrote yesterday that the longer prices move against the cycles, the bigger the rebound will be. Our pair could make is as far as the 112th degree at 1.1639 (today’s limit) unimpeded. A breakout of 1.1552 (meaning a breakout of the local upwards channel) will, conversely, increase pressure on buyers. The pair is trading above the LB balance line, which is therefore now providing support to buyers.

Latest reviews

Everyone has the chance to make a profit

You don't need to trade on your own to make a profit. Make a profit by entrusting your funds to experienced traders!


There's a better website for you

A new exciting website with services that better suit your location has recently launched!

Sign up here to collect your 30% Welcome Bonus.