On Tuesday, trading on the EURUSD pair closed down. The pair’s decline was minimal as the bulls managed to partially recover their losses in the US session and bring the market into a sideways trend. The pair initially came under pressure after weak data from the Eurozone and Germany, in addition to a broadly stronger dollar after a rise in US bond yields. Pressure was then exerted on the dollar following optimism surrounding the trade talks between the US and China, which increased demand for risky assets, while reducing it for the safe havens.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart.
The balance line and 45th degree are providing strong support, keeping the bears held up at 1.1429. The intraday minimum is at 1.1423.
The hourly indicators favour the bears, while cycles and patterns favour the bulls. Because of this and today’s news releases, I expect to see a rebound to the LB and a rise to the 67th degree at 1.1503. I don’t expect any further growth from the euro given that the FOMC is publishing its minutes today.
In other news, the British parliament will start debating the government’s EU withdrawal agreement today, with a vote planned for next week. This uncertainty will put the pound under pressure. We should also keep an eye on the headlines regarding the talks between the US and China. If something goes wrong, traders will retreat to the yen, and the euro will lose ground against the dollar.