EURUSD pair consolidating around the trend line

Previous:

On Thursday the 13^th of June, trading on the EURUSD pair closed down. The rate dropped after the breakout of the 1.1285 support (trend line, lower boundary of the channel, and 45^th degree at 1.1291). Pressure on the euro increased after a statement from the IMF labelling the Eurozone’s central economic forecast precarious.

Markets are currently under the influence of several factors: the likely lowering of interest rates by the Fed, the trade dispute between the US and China, uncertainty over Brexit, and sanctions against Iran and Venezuela.

Day’s news (GMT+3):

• 15:30 US: retail sales (May).
• 15:55 UK: BoE’s Governor Carney speech.
• 16:15 US: industrial production (May).
• 17:00 US: Michigan consumer sentiment index (Jun), business inventories (Apr).
• 20:00 US: Baker Hughes US oil rig count.

Current situation

Most of the majors are trading down in Asia. At the moment, we have a contradictory picture of the euro in terms of technical analysis. On the chart, I’ve laid out one scenario with a renewed minimum and a rebound to the balance line at 1.1290/95. Another potential scenario is a descending triangle formation and the downwards wave ending at 1.1251. I went with the first one because the stochastic is in the buy zone, and after a bullish divergence, there’s a good chance of the pair returning to around 1.13.

By Alpari.com