By Gabriel Ojimadu, Alpari
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On Wednesday the 4th of July, trading on the euro closed slightly up. The US had a national holiday, so market activity was pretty low. In the first half of the day, the single currency dropped to 1.1631. In the US session, the rate recovered to 1.1675.
The reason for this growth with such a thin market may have been a Bloomberg report, which said that several members of the ECB’s governing council believe that raising interest rates at the end of 2019 would be too late. The euro jumped 35 pips, which changed the wave structure from what I’d been expecting. Now let’s see what awaits us this Thursday.
Day’s news (GMT+3):
Fig 1. EURUSD hourly chart. Source: TradingView
Current situation:
Free Reports:
My expectations for yesterday proved partially correct. The rate dropped below its target level. Today, according to my forecast, the drop should have continued to 1.1600, but the news from Bloomberg has changed market sentiment and nullified this outcome.
It’s also unclear why the euro strengthened across the board in the last hour of the session. The dollar is showing mixed dynamics against the majors. All the euro crosses have moved into positive territory.
There were no statistics released yesterday, so there must have been some kind of statement from ECB representatives or another article was published on the subject of interest rates or QE reversal that cites a source from the ECB.
Buyers have broken the resistance at 1.1676 and are now trying to push towards 1.1720. There’s an intermediate resistance level at 1.1690.
The euro is currently trading at 1.1686. With the situation as it is, I can’t see any signs of a price drop. The indicators also point towards further growth. The crosses will drag the euro up with them until trading gets underway in London.