EURUSD: correction expected after Friday’s rally

July 17, 2017

By Gabriel Ojimadu, Alpari

Previous:

On Friday the 14th of July, trading on the euro closed up against the US dollar. The price rose sharply after the release of US data. The consumer price, retail sales and Michigan University indices did not match up to expectations. US 10Y bond yields fell by 2.6% on this news, reaching 2.27%. The euro rate restored to 1.1468. Buyers hit a session high of 1.1472 before trading closed.

US statistics:

  • The Michigan University consumer sentiment index fell to 93.1 (forecast: 95, previous reading: 95.1).
  • The industrial production index for June grew by 0.4% (forecast: 0.4%, previous reading: 0.1%).
  • The consumer price index in June came to 0.0% MoM, 1.6% YoY (forecast: 0.1% MoM, 1.7% YoY, previous reading: -0.1% MoM, 1.9% YoY).
  • The retail sales index fell by 0.2% for the month. The same index excluding autos also fell by 0.2%

Day’s news (GMT+3):

  • 12:00 Eurozone: CPI (Jun), CPI core (Jun);
  • 15:30 Canada: foreign portfolio investment in Canadian securities (May);
  • 15:30 USA: NY Empire State manufacturing index (Jul).

EURUSD rate on the hourly. Source: TradingView

My expectation of growth for the euro on Friday rang true. The single currency appreciated against the greenback to 1.1424 and was trading beneath the LB balance line up until the US session. After the release of US statistics, the price restored to 1.1472.

Free Reports:

Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter





Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.




So, what’s in store for the euro today? The 90 degree Gann level is at 1.1478. Missing this level by 3 pips, our pair has started a downwards correction from 1.1475. In my forecast, I’m expecting the euro to fall against the dollar to 1.1415 against Friday’s movements. The economic calendar is virtually empty, so nothing should interrupt the correction, at least until the balance line.

In order for the euro to break 1.15, the bulls can’t allow the bears to take the price any lower than 1.1442/40 (trend line from 1.1371). Given that the Stochastic is down, the price could go up a bit before falling. If the hourly candle closes above 1.1490, the euro won’t fall.

Source: “EURUSD: correction expected after Friday’s rally“
7 years ago
InvestMacro

InvestMacro is a finance website dedicated to helping investors make better informed decisions through educational content and products