By Gabriel Ojimadu, Alpari
Previous:
On Wednesday the 21st of November, trading on the euro/dollar pair closed slightly up (+6 pips). In Europe, the euro dropped against the dollar to 1.1713. By the end of the day, the price had recovered to 1.1752. A decline in US bond yields weakened the dollar across the board, giving euro bulls a boost. The price has stabilised around the 1.1740 mark just below the balance line.
Day’s news (GMT+3):
Fig 1. EURUSD rate on the hourly. Source: TradingView
Sellers twice tried to break down the 90th degree on Tuesday, going against the market with the support of the crosses, but their efforts came to nothing. The dollar’s universal decline pushed the euro back up. The price is currently consolidating beneath the LB balance line at 1.1740. Traders are buying the euro against the Aussie dollar and selling against the other majors.
Although yesterday’s intraday pricing model was slightly more in favour of buyers, my forecast hasn’t changed. The MA lines are looking downwards. I’m expecting to see a rebound from the LB and a decline for the euro against the dollar to 1.1674. I think this decline will still play out even if quotes rise again to the upper boundary of the A-A channel (1.1767) before dropping. Political uncertainty in Germany should restrict buyers as long as there aren’t any positive developments on this front.
Free Reports:
Today’s key event is the FOMC minutes. The US will celebrate Thanksgiving on Thursday. A lot of Americans will take Wednesday and Friday off as well, so trader activity is expected to decline as the week progresses. This means that volumes will be lower, which could lead to short-term surges in volatility.