EURUSD: pair poised to drop again

Previous:

On Tuesday the 27^th of November, the euro lost ground against the dollar. This was brought about by a broadly stronger dollar, which rose on the back of Donald Trumps announced plans to raise tariffs on Chinese goods. Additionally, rumours circulating that the European Commission could impose sanctions on Italy, as well as the GBPUSD pair’s decline, also weighed down on the single currency. The euro dropped to 1.1278 (90 degrees) against the dollar.

Day’s news (GMT+3):

• 10:00 Germany: Gfk consumer confidence survey (Dec).
• 12:00 Switzerland: ZEW survey – expectations (Nov).
• 12:00 Eurozone: M3 money supply (Oct), private loans (Oct).
• 16:30 US: GDP (Q3), goods trade balance (Oct), core personal consumption expenditures (Q3).
• 18:00 US: new home sales (Oct), Richmond Fed manufacturing index (Nov).
• 18:30 US: EIA crude oil stocks change (23 Nov).
• 20:00 US: Fed Chair Powell’s speech.

Fig 1. EURUSD hourly chart.

Current situation:

External factors pushed the euro down to the 90^th degree against the dollar yesterday. The euro is now trading at 1.1297. The 90^th degree isn’t an important level for the euro, so I expect the pair to drop to 1.1251. Since the stochastic is in the sell zone, as soon as we get a bearish signal on the current downtrend, the drop will intensify.

On the hourly timeframe, the LB balance line is acting as a resistance. On the current bar, it runs through 1.1323. From today’s news, it’s worth keeping an eye on Fed Chair Jerome Powell’s speech.