Yesterday, the single currency closed down against the US dollar for the third session in a row. After falling to 1.1336, trading on the pair levelled out and was trading at around 1.1347 until the end of the session. Activity on the Forex market yesterday was minimal due to there being a national holiday in the US.
Day’s news (GMT+3):
EURUSD rate on the hourly. Source: TradingView.
My expectations for yesterday came off in full. The 90th degree stopped sellers at 1.1336. Until the end of the day, the pair traded at around 1.1347. After a 12-hour flat, the euro rate corrected in Asia to 1.1369. At the time of writing, the euro was trading at 1.1355.
Technical analysis on the hourly timeframe gives an ambiguous picture. Cyclical analysis on the 4-hour and daily timeframes points to the continuation of the downwards correction. Some bullish divergences have formed on the hourly AO oscillator.
Given that the AO indicator has unloaded to zero, and the Stochastic is looking down, I’m expecting the support at 1.1343 to be broken and for the euro to fall to 1.1312 (112 degrees). The slide could stop at 1.1328, where there is a daily support that buyers will have to defend; otherwise we’ll see increased closing of long positions.
Today, on the 5th of July, trader attention will be focused on the FOMC’s minutes as well as Britain’s services PMI. The UK statistics will have an effect on GBP currency pairs. If the index is better than expected, the euro/dollar will be flat until the FOMC’s minutes are published.
Today, I think it better to watch the market from the sidelines. If the hourly candlestick closes above 1.1382, better not to sell your euros.