By Gabriel Ojimadu, Alpari
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On Tuesday the 19th of June, trading on the euro closed down. After an upwards correction to 1.1645, the euro slid to 1.1531 (-114 pips) during the European session. The greenback climbed across the board on the back of an escalation to trade dispute taking place between China and the US, piling further pressure on the EURUSD pair. Mario Draghi’s comments also weighed on the euro, although this news is playing second fiddle to the trade war. When the US session came around, the rate corrected to 1.1596.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
The euro dropped to the 90th degree in the space of 6 hours. The rebound from the 45th degree amounted to 45 degrees. Growth was held up by the horizontal Gann level along with the balance line. At the time of writing, the euro is trading at 1.1581.
I think that pressure on the euro is going to remain in place. The real question is whether it’s going to start declining straight away or a few days from now. I also considered that the pair might consolidate within the channel (dashed lines) in a range of 1%. On the current hour, its boundaries are at 1.1523 and 1.1638.
Free Reports:
Today (Wednesday), it’s worth keeping an eye on all the speeches from the heads of central banks; with Powell, Kuroda, Lowe, and Draghi all set to speak. Their words could turn out to have no influence on markets, but it’s better to be prepared for a surge in volatility just in case.
Considering that the euro crosses were all declining when I made my forecast, I expect the euro to drop to 1.1518. The lower line of the channel will act as a support.
The hourly stochastic indicator is in the buy zone. This means that the drop may be delayed for 4 – 5 hours. The AO and CCI are both in neutral territory, so the euro will follow the lead of other currencies. At the moment, most currencies are trading down against the US dollar. The dollar is recouping its losses against the yen and franc.