Hourly
Yesterday’s Trading:
On Thursday, the euro/dollar rose to 1.0762. The euro/dollar was down to 1.0668 after the publication of ECB minutes, but then it quickly restored itself. The strengthening of the euro is linked to a fixing of profit on short positions. The ECB announced that it is ready to alter its monetary policy at its December meeting. The US statistics were ignored.
Initial unemployment benefit applications in the US for last week were down from 276,000 to 271,000.
The Philadelphia Fed’s business activity index was up from -4.5 to 1.9.
The Index for leading US indicators for October stood at 0.6% (forecasted: 0.6%, previous: -0.1%).
Main news of the day (EET):
- 10:00, ECB’s Mario Draghi to speak;
- 15:30, Canadian September retail sales;
- 17:00, Eurozone November consumer confidence index;
- The Fed’s Bullard and Dudley are set to speak.
Market Expectations:
The long-term picture on the EUR/USD is still a bearish one. The bulls are trying to turn around the current downward trend by buying euros on the bounce. The bears still do have a chance at the moment to turn the situation around and put it under their control. They just need to close the day around 1.0650 and then the weekly candle won’t look interesting for the buyers. I believe that the bulls won’t settle down until the rate returns to 1.0829 (12th November maximum). In this case, every trader will see an upside down head and shoulders model on the daily.
Technical Analysis:
- Intraday target maximum: 1.0775, minimum: 1.0709 (current Asian), close: 1.0750;
- Intraday volatility for last 10 weeks: 103 points (4 figures).
The growth of the EUR/USD has stopped around the U3 near the 135th degree. The pair has corrected, the hourly indicators have offloaded: now we could see a return to 1.0775. Draghi is speaking today, but it’s unlikely that he will say anything new. From 20th November, everything is in the bulls’ hands.
Daily
The trend line has been broken. The next target is at 1.0820 as part of a rebound. According to the cycle, from 20th November the bear phase has switched into a bull one. Now to the Weekly.
Weekly
If the sellers aren’t able to take the rate back to 1.0650, a pinbar will form on the weekly. As part of the pinbar, the conditions for a growth of the EUR/USD to 1.0820/50 will be created.
