On Tuesday the euro/dollar closed down. The euro lost 87 points against the dollar (to 1.0698), whilst the British pound lost 113 points (falling to 1.2656). For me these were both classic corrections after a real strengthening for both currencies.
We should mark out the industrial manufacturing data in the UK and the US oil reserve statistics as the main events on the calendar today. The first will have an effect on the pound and the second will have an effect on oil and commodity currencies. Via the crosses there will be price fluctuations of the key pairs against the dollar.
The euro has almost returned to the balance line. For Wednesday I’m looking at a restoral of the price to 1.0772 according to a wave structure. Here long positions can be closed and we can head off the market for when Draghi speaks at his ECB press conference on Thursday. Instead of Draghi I wanted to write Trichet, but why? Maybe he will make an announcement in the coming days.
Day’s News (GMT+3):
Euro/ rate on the hourly. Source: TradingView dollar
Intraday forecast: minimum: 1.0700, maximum: 1.0772, close: 1.0753.
As I expected, the euro/dollar updated the session minimum and then fell. The rate fell below my expected forecast of 1.0734. The support at 1.0730 didn’t hold and due to a general strengthening of the dollar, the price fell to 1.0698.
The pair’s fall stopped near 90 degrees. In accordance with my forecast, I expect a bounce to 1.0772 from the LB (the average line at 55). There is a little bit of worry about the euro/pound, so at trade opening in Europe I’ve gone for a downward movement to 1.0700. The cross rate isn’t looking in great shape for a growth. If the 90th degree will be broken (closing of the hour below 1.0690), then it would be better to stave off euro purchases. We will have to wait for a rebound to the 122-135 degree zone.