By Gabriel Ojimadu, Alpari
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On Tuesday the 10th of October, trading on the euro/dollar pair closed up. The euro rose from 1.1740 to 1.1826 against the greenback. German data, talk of reversing the ECB’s asset purchasing program, a weakening of the US dollar across the market, and a drop in US bond yields all provided support for the single currency.
Day’s news (GMT+3):
Fig 1. EURUSD rate on the hourly. Source: TradingView
Yesterday’s predictions came off in full. The technical picture for the next few days looks wonderful. The right shoulder of the head and shoulders model is forming. Here, the euro should strengthen to around 1.1860/80.
We should note that just as the euro started to rebound, its growth was bolstered by statements from ECB representatives regarding the need to reverse its asset purchasing program next year.
Free Reports:
From the low of 1.1699, an upwards C-C channel has formed. This morning’s unsuccessful attempt by sellers to break through its lower boundary led the price to ricochet to 1.1820.
Today, I’m predicting the price to rise to 1.1860; although I’m not sure whether or not this will be the case. First of all, buyers were rebuffed at around the 135th degree. Secondly, the FOMC is publishing the minutes of its latest meeting today and it’s not clear how markets will react. If sellers manage to break through the trend line of the C-C channel and the candlestick closes below 1.1793, my prediction will fail.
To make an informed trading decision today, I recommend keeping an eye on the dynamics of US 10Y bond yields, the US dollar index, and crosses involving the euro. Bond yields are trying to push upwards. The euro is trading up against the franc, pound, yen, and Canadian dollar. It’s trading down against the Aussie dollar. If nothing changes on these fronts, growth on our pair will continue.