EURUSD: trading on the euro has opened up in Europe

By Gabriel Ojimadu, Alpari

Previous:

On Tuesday the 5^th of May, trading on the EURUSD pair closed up. The single currency initially dropped to 1.1653 in the European session. By the end of the day, buyers had recovered all of their losses, bringing the rate back up to 1.1732.

PMI data from the US was strong and exceeded market expectations. Their positive effect was short-lived, however. Rumours that the ECB will discuss its QE program at its next meeting on the 14^th of June shifted the sentiment among speculators. The euro rose against most other currencies and currently shows no sign of losing the ground it’s gained.

US data:

• ISM non-manufacturing PMI (May): 58.6 (forecast: 57.5, previous: 56.8).
• Markit services PMI (May): 56.8 (forecast: 55.7, previous: 55.7).

Day’s news (GMT+3):

• 10:15 Switzerland: CPI (May).
• 15:30 Canada: imports (Apr), exports (Apr), building permits (Apr).
• 15:30 USA: trade balance (Apr), nonfarm productivity (Q1).
• 17:00 Canada: Ivey PMI (May).
• 17:30 USA: EIA crude oil stocks change (1 Jun).

Current situation:

Yesterday, everything turned out as I expected. After an unsuccessful attempt at continuing upwards, our pair broke through the trend line. The euro dropped after the publication of positive UK data. From around 1.1655 – 1.1663, prices recovered to 1.1732. The ECB rumours helped to produce the second scenario on yesterday’s chart.

I’ve had to rewrite this review three times already due to sharp price fluctuations, which is why there is no chart today. I couldn’t figure out what caused these fluctuations, but I’m setting a resistance a 1.1760. According to chart analysis, a rebound is likely here. I don’t see any particularly important news releases for today.