By Gabriel Ojimadu, Alpari
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Trading on the Euro closed down on Thursday. The dollar continues its rise after the FOMC meeting. The Euro is also coming under added pressure from the EUR/GBP cross, which fell after the Bank of England’s meeting. An adjustment of open positions on the EUR/GBP pair took place in response to the vote swing at the BoE’s monetary policy committee, with three members voting for a hike in interest rates. The EUR/USD pair fell without resistance to 1.1132.
Market expectations:
The pair has been in a sideways trend at 1.1145 for the last 16 hours. I predict that the Euro will continue to fall to around 1.1085 – 1.1105. A surge in volatility is expected when the BoE publishes its quarterly bulletin. There are also inflation statistics set to come out of the Euro zone, as well as some US housing market data and a survey from the University of Michigan.
Day’s news (GMT+3):
EURUSD rate on the hourly. Source: TradingView.
Free Reports:
Intraday forecast: low: 1.1105, high: 1.1156, close: 1.1118.
On Thursday, sellers broke 1.1194 and 1.1175 levels (trend line on the daily timeframe). The Euro’s slide stopped at the 135th degree. A support runs through this level on the daily timeframe (in yesterday’s chart). Accounting for the pressure coming from the crosses, I’m expecting our currency pair to fall to 1.1110. The immediate target after the breakout of the trend line is 1.1085.
Could the EUR/USD pair go into a correctional phase? Yes. The 135th degree could induce a reversal, so after a two-day fall of 160 pips, we could see the beginning of a correction before the US session’s close. Should the rate restore to 1.1185, the case for a drop on Friday disappears, but the target of 1.1085 remains.