By Gabriel Ojimadu, Alpari
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On Tuesday the 24th of October, trading on the euro/dollar pair closed up. The euro rose along with the dollar thanks to high demand for it on the crosses, but still ended up losing the ground it gained by the end of the session. The euro dropped from a session high of 1.1793 to 1.1758.
Pressure on the euro increased after news that Republican Party senators favour John Taylor (an advocate of high interest rates) for the post of Federal Reserve Chair. US 10Y bond yields jumped by 0.022 on this news to reach 2.427%.
Day’s news (GMT+3):
Fig 1. EURUSD rate on the hourly. Source: TradingView
Despite the fact that all the majors lost ground against the dollar yesterday, the euro/dollar pair closed up. My expectations of a correction rang true. The price missed the 1.18 mark by 7 pips.
Free Reports:
Today, the situation is ambiguous. I’ve given a lot of thought as to whether the euro will rise or fall today. The thing is that the hourly cycles and intraday patterns with a 120-hour window indicate a rising euro, while the older timeframes point towards a decline.
The euro enjoyed increased demand yesterday on expectations that the ECB will announce a reduction in its QE program on Thursday. This is exactly what’s been throwing me off. In the end, I’ve gone for a decline for the euro based on the older timeframes and on the fact that the Aussie dollar is falling after the publication of Australian inflation data. The Aussie dollar could drag some other currencies down with it today. It’ll be interesting to see traders’ reaction to the UK’s GDP figures for Q3. The euro/pound cross could cause some unpredictable fluctuations on the euro/dollar pair.
The drop won’t happen if the TR trend line gets broken. On the current hour, it’s running through 1.1763.