Technical Analysis by Alpari

Alpari

Active Trader
Jul 6, 2015
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Monday Against Friday

Previous:

On Friday we had a disappointing labour market report from the US. Job creation in the non-farming sector of the country increased in May by just 38k, whilst it was expected to rise by 160k.

April’s numbers were revised downwards from 160k to 123k and March’s dropped from 208k to 186k (last month they were reduced from 215k to 208k). The total reassessment was a fall of 59k.

The level of population who make up the workforce fell by 0.2% to 62.6%. Due to this, unemployment fell to 4.7% (forecasted: 4.9%, previous: 5.0%). The index for US average hourly wages during May was 0.2% (forecasted: 0.2%, previous: reassessed from 0.3% to 0.4%).

The euro/dollar first rose to 1.1297 on the back of the employment report, then jumped to 1.1373 after weak ISM service sector figures. The ISM index fell from 55.7 to 52.9. The euro’s strengthening stopped at the top of the chart near the U3 (straying from the average 55 line by 1,618%).

Market Expectations:

After the payrolls I always look at a countermovement against that of Friday. At the moment, the euro/dollar has returned to the U3. Taking the temporary factor for a rebound into account, the balance point is at 1.1285 at the LB. My target is 1.1293.

Today the news is something I’m not concerned with. The only exception I’ll make to this is Yellen speaking. She will do so at 19:30 EET. It will be really interesting to find out what she has to say about the payrolls and interest rates. Traders on Friday already factored the Fed keeping monetary policy unchanged in June and July into the prices.

The GBP weakened throughout the market after a survey from the Observer/Opinium was published. According to the survey, those wanting to leave the EU rose to 43% against 40% who wish to remain. The euro/pound gave support to the euro, but a correction could nevertheless not be avoided.

Day’s News (EET):

  • 17:00, US May labour market conditions index;
  • 19:30, Yellen speaking.
Technical Analysis:

Intraday forecast: minimum: 1.1295, maximum: 1.1371 (current Asian), close: 1.1300.
eur_060616.png


Euro/dollar rate on the hourly. Source: TradingView

From the 1.1136 minimum the euro strayed upwards to the U4 or by 202 degrees. The interim resistance level is the 180 degree level. As I already mentioned, I’m ignoring the news today and expect a fall of the euro to 1.1295. Although this weakening may not take place due to Yellen speaking at 19:30 EET. The way the rate falls will set the tone for the future price pattern. Here we could either be returning back to 1.1215 or we’re heading to take 1.1470. A lot depends on what Yellen has to say.
 

Alpari

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Jul 6, 2015
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Fall in Euro; Fall in Volumes

Previous:

The euro/dollar on Monday closed doji. This is a candle whose closing price is the same as that of the opening. A spike in volatility took place on the American session when Yellen spoke.

Yellen said that the labour market data gives the central bank cause for concern, but they won’t rush to make conclusions based on one report. On the whole the labour market situation is decent: unemployment benefit numbers are low and wage growth should push up inflation. A further gradual increase in the interest rate will take place if the labour market improves and there is inflation growth.

At the beginning of her speech the euro/dollar fell to 1.1325. Then the pair was trading for around half an hour at 1.1360. Having updated the day’s maximum, the rate returned to 1.1350.

Market Expectations:

On Tuesday the news is less than ample. If the USD can’t pick itself back up after Yellen’s speech, this means we should expect another wave of weakening. Since the euro is fighting up at the top of the MA channel after Friday’s rally, I’m limiting the strengthening to 1.1406. The sharper the bounce from 1.1406, the higher the likelihood of a correctional movement to 1.1320 on Wednesday and to 1.1250 on Thursday.

Day’s News (EET):

  • 12:00, Eurozone reassessed GDP for Q1 of 2016;
  • 17:00: Canadian business activity index for May from Ivey;
  • 23:35, weekly oil reserve report from the API.
Technical Analysis:

Intraday forecast: minimum: 1.1339, maximum: 1.1406, close: 1.1368.
eur_070616.png


Euro/dollar rate on the hourly. Source: TradingView

The euro/dollar spent pretty much all day by the U3. According to the AO and CCI indicators, bull divergence has formed. Only the AO indicator is already above the zero line and the oscillator stochastic is in the buy zone.

There’s another important factor that’s worth attention. A fall in prices means a fall in trading volumes. This indicates that we are seeing an accumulation phase. Taking the factors listed above into account, I reckon the euro will weaken against the dollar to 1.1339 and then grow to 1.1406.

The distance between the 1.1373 and 1.1392 maximums is 21 hours. I expect to see three peaks by the U3. The third peak should form at 17:00 EET. My forecast will cancel if there’s a close of the hourly candle below 1.1324. If you’re buying euro, do so from the LB.
 

Alpari

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Jul 6, 2015
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Long Overdue Correction for Euro

Previous:

On Wednesday the euro/dollar managed to lift above 1.14. Due to oil and gold prices rising, the euro’s strengthening was held back in the EUR/AUD and EUR/CAD crosses. The euro, just as did other currencies, received support from a weakened dollar which traders were selling due to reduced expectations of a Fed rate rise.

Market Expectations:

After Friday’s payrolls, the euro has been in a three-day upward correction. During this time, between the AO indicator and the price on the hourly we can see that a double bear divergence has formed. On the daily we have 1.1450 as a target. If the dollar will weaken throughout the market again today, this target will be reached today. I’ve dumped the bulls for the time being and am sitting on the side-lines whilst the rate hasn’t returned to 1.1375. I like how the indicators look for euro purchases on the hourly and the 4-hour period. A sharp correction could see the euro fall to 1.1360.

Day’s News (EET):

  • 10:00, Draghi to speak;
  • 15:30, Canadian new housing price index for April, capacity utilisation in Q1 of 2016. US unemployment benefit applications for the week ending 05/06/2016;
  • 17:30, Bank of Canada’s financial system report;
  • 18:15, Bank of Canada’s Poloz to speak.
Technical Analysis:

Intraday forecast: minimum: 1.1375, maximum: 1.1415 (current Asian), close: 1.1401.
eur_090616.png


The euro’s growth has slowed around 1.1410. The price is in the middle of the channel. In Asia the euro has strengthened against the dollar to 1.1405. Meanwhile the volumes have not increased. Taking the bear signal (double divergence between the AO indicator and price) into account, in my forecast I’ve gone for a downward correction to the lower limit of the channel at 1.1375.

There’s another thing. On the option’s market for July futures at 1.15, open interest is significantly up. Since the price is out of the money, it will be defended by those who’ve sold it.

A break in the channel at 1.1378 will hasten the euro correction to the 45th degree to 1.1360.
 

Alpari

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Jul 6, 2015
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Expected Euro Strengthening

Previous:

After a break in the support at 1.1375 and the balance line (average line with a 55 period) on Thursday, the euro/dollar dropped to 1.1305 without a pit stop. The buyers were pushed into closing long positions by the yen crosses.

Later on some information came out about how the euro will be sold because the ECB purchasing corporate bonds. The traders focussed on how the bank acquired bonds from Italy’s largest telephone company - Telecom Italia SpA - on 8th May and this company has two speculative rating levels from Moody’s and S&P.

The ECB noted, however, that these securities still have an investment level from Fitch. This runs in line with ECB requirements formally, but traders saw the inclusion of Telecom Italia SpA in the list of purchases as the regulator’s readiness to buy up bonds without investment levels if QE is to be expanded.

The dollar received a support during the American session from data on unemployment benefit applications in th US. The number expectedly fell from 268k to 264k (forecasted (270k).

Market Expectations:

The euro/dollar fell 124 points to 1.1291. I reckon the euro will drop to 1.1281 after which I expect to see a revival of the quotes to 1.1345. Today is Friday; the news is lacking, so a correction on yesterday’s downward wave could be just about right. If the buyers pass 1.1281, the next support level will be 1.1255.

Day’s News (EET):

  • 10:00, German central bank president Weidmann to speak;
  • 11:30, UK May consumer inflation expectations;
  • 15:30, Canadian unemployment level and job creation in May;
  • 17:00, US preliminary consumer sentiment and inflation expectations in June from the university of Michigan;
  • 21:00, US May federal budget balance.
Technical Analysis:

Intraday forecast: minimum: 1.1285, maximum: 1.1345, close: 1.1324.
eur_100616.png


Euro/dollar rate on the hourly. Source: TradingView

The euro’s weakening on Thursday slowed at the 90th degree. The price in Asia is nearing 112 degrees. Without the news, 112-135 is an inversion level. The volumes reduce with a fall, so I’ve forecasted an upward correction for the euro from 1.1285 to 1.1345. By 17:00 EET, the LB will be at this level, thereby strengthening the resistance.

Whilst the euro was strengthening, option traders bought the ball and chain. At the 1.12 strike we could see a sharp increase in volume. For the past few days there’s been a price range of 1.12-1.15 for volumes on July futures. Here the price could hold out for a few days.
 

Alpari

Active Trader
Jul 6, 2015
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Expected Euro Correction to 1.1285 After Friday

Previous:

The euro/dollar was trading above the 112th degree on Friday before the American session. The rate was under pressure due to the dollar strengthening. This was caused by a weakening of the British pound after the publication of new Brexit survey results. According to data from the ORB for The Independent newspaper, 55% of respondents are ready to vote leave, with 45% to vote remain. The euro by US trading close was down to 1.1245.

The stats didn’t have much effect on the key currencies. The US consumer confidence index fell from 94.7 in May to 94.3 in June. It was forecasted to fall to 94. The index for consumer expectations fell from 84.9 to 83.2, with the index for current economic conditions rising from 109.9 to 111.7.

Market Expectations:

As you know, my Monday’s forecast always goes against Friday’s movements. The euro has updated its minimum in Asia. The dollar was being sold for 1.1250 euros at 7:14 EET. I expect a correctional movement to 1.1245 for the American session.

Market participant attention has drifted to the FOMC meeting on 15th June. The likelihood of a rate rise this month has fallen to 2%. The announcements made will be important for traders as they could hint at the date when rates will rise.

Day’s News (EET):

  • 16:30, UK index for leading indicators from the CB.
Technical Analysis:

Intraday forecast: minimum: 1.1232 (current Asian), maximum: 1.1285, close: 1.1265.
eur_130616.png


Euro/dollar rate on the hourly. Source: TradingView

The fall in the euro from its 1.1415 maximum was 157 degrees. It isn’t an important support since the price could easily shift to 180 degrees or the D3 line. Since today is Monday and I’m always looking at movements against that of Friday, in my forecast I’ve gone for a revival of the euro to the 45th degree. This level will be further strengthened by the balance line in the evening, with the LB now at 1.1315 and the 112th degree from the 1.1415 maximum. The 112th and 45th degrees are forming a price knot at 1.1282-1.1285.
 

Alpari

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Jul 6, 2015
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Market Participants Getting to Grips with UK Leaving EU

Previous:

The euro/dollar closed down 83 points yesterday at 1.1206. The euro fell under pressure after German 10-year bonds fell below zero. They are currently at -0.001% against a maximum fall’s 0.027%.

The euro and the pound updated their minimums against the dollar after the release of new surveys which indicated Brexiters are gaining more ground.

Yesterday surveys from YouGov and TNS were published. According to TNS: 47% of Brits are ready to vote for the UK to leave the EU, with 40% against leaving and 13% undecided. 2,497 people took part in the online survey. According to YouGov, 46% want to leave, 39% - remain and 15% are undecided.

The surveys reflected an increase in those wishing to leave the EU in comparison with previous values and with this the GBP weakened against the USD and euro. It seems the market has reached boiling point. Market participants are readying themselves for a Brexit and have switched to the Fed meeting.

Market Expectations:

A two-day meeting of the US Fed’s FOMC began on Tuesday. Its outcome will be in the public domain at 21:00 EET. It is expected that the interest rates will be left unchanged. After the meeting there will be a press conference held by Janet Yellen and the forecasts will be published.

If the yield on German 10-year bonds heads positive, the euro/dollar will shift up to 1.1240 (trend line). After Yellen speaks it’s unclear where the euro will close.

Day’s News (EET):

  • 11:30, UK index for changes in average wages and index for changes in salaries in April, changes in the number of applications for unemployment benefit (May);
  • 12:00, Eurozone trading balance taking seasonal fluctuations into account during April;
  • 15:30, Canadian changes in housing sales from builders in April. US May PMI and manufacturing index from NY Fed for June;
  • 16:15, Changes in industrial production in May;
  • 17:30, US oil reserve changes 6-12th June -3.2 million barrels;
  • 21:00, FOMC interest rate decision, economic forecast and FOMC announcement;
  • 21:30, Yellen holds a press conference;
  • 23:00, US net purchases of long-term securities in April.
Technical Analysis:

Intraday forecast until 21:00 EET: minimum: 1.1189 (current Asian), maximum: 1.1236, close: n/a.
eur_150616.png


Euro/dollar rate on the hourly. Source: TradingView

Due to the fall in the German 10-year bond yields, the euro has flown by the 45 and 67th degrees. The sellers have won back over 70% of losses which they incurred on 3rd June after weak US labour market data.

As I said above, the market participants are adapting to the negative Brexit survey results. This means that inside they are ready to buy the euro. If the Brits vote to leave the EU, the process of the Brexit itself will be drawn out and will take more than a year. Traders are interested in the process up to the referendum, not afterwards.

According to the hourly CCI indicators and the stochastic, bull divergence has formed and so I reckon we’ll see a strengthening of the euro, not a weakening of it. I’ve also incorporated a double bottom into my calculations. We can say that the conditions for a correction are ripe. We just need to pass 1.1220.

My forecast is until 21:00 EET. I’ve no idea how the market will react to Yellen speaking. If the pressure on the euro gathers pace, the currency will shift to 1.1144. Below this level passes the trend line (from 1.0516 and 1.0821 minimums).
 

Alpari

Active Trader
Jul 6, 2015
271
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Euro Breaks from Trend Line

Previous:

The euro/dollar fell to 1.1130 on Thursday following the UK pound. By the day’s close the buyers won back almost 70% of their losses. The price returned to 1.1251. The pair turned on a spindle due to news about the murder of British MP Jo Cox. The MP for Batley and Spen was attacked while holding a surgery with her constituents.

Due to this tragic incident, the Bank of England cancelled the speech that was to be given. Rumours then immediately appeared on the market that the referendum may be cancelled or moved to another date. All currencies strengthened against the dollar.

Market Expectations:

On Thursday the euro/dollar broke from the trend line. I do hope that the killer didn’t know technical analysis and how what he was to do would reflect on currency rates. Nevertheless, he changed the mood of those that were buying USD.

An inverted pinbar formed on the daily (candle with a long lower shade). For it to be activated, we need to strengthen above 1.1294. I’ve a break on the intraday graph today. The economic calendar is empty. For Friday I think a sideways under the trend line (H1.1415-H1.1294) in a 1.1235-1.1280 range is on the cards.

Day’s News (EET):

  • 11:00, Eurozone balance of payments taking seasonal fluctuations into account in April;
  • 15:30, Canadian May CPI. US construction permits issued and foundations lain in May;
  • 18:00 ECB’s Draghi to speak;
  • 20:00, Baker Hughes drilling rigs data;
  • 20:05, BoC’s vice president Wilkins to speak.
Technical Analysis:

Intraday forecast: minimum: 1.1235, maximum: 1.1280, close: 1.1252.
eur_170616.png


Euro/dollar rate on the hourly. Source: TradingView

The euro/dollar fell to the crossing of two lines: the first line passed through the 1.1232-1.1188 minimums and the second passed through 1.0516-1.0821. The additional strengthening zone at 1.1130-1.11140 is in place from the 135th degree.

To date the euro bulls have won back 80% of losses from yesterday’s fall to 1.1130. The price returned to the bearish trend line. From the minimum the pair’s growth was 112 degrees.

Taking into account that the calendar is empty this Friday, I expect to see euro fluctuations below the trend line. I reckon that a a triangle will form. I’ve not incorporated Draghi into my calculations since he has a powerful effect on the market only during the press conference given after the ECB meeting.

Despite the day’s pinbar, it’s unlikely that people want to aggressively buy euro before the weekend and the upcoming Brexit surveys. A strong resistance level is being formed by the 1.1298-1.13 levels. This is the region up to where the rate could reach without news and after a break in the trend line.
 

Alpari

Active Trader
Jul 6, 2015
271
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Euro Technically Ready for Growth

The euro on Monday closed up against Friday’s close, but down from Asian market opening. The euro strengthened against the dollar to 1.1382 during the Asian session. The dollar weakened due to the Brexit fear factor dying down. The most recent surveys are indicating a rise in those wishing to remain in the EU.

The pound/dollar rose by 371 points to 1.4717 due to these surveys. The euro/dollar returned to 1.1300 after the morning’s rally. The euro’s weakening was caused by a fall in the euro/pound rate.

Market Expectations:

Yellen is set to speak today and tomorrow with a six month report before US congress. She will speak about the state of the economy and monetary policy. Investors will be waiting for her to give a hint about when rates will be put up by the Fed. Her task is to not to make the market nervous before the UK referendum this Thursday. Since the euro corrected on Monday against the dollar, by the end of the day it should strengthen to 1.1359.

Day’s News (EET):

  • 11:30, UK public sector borrowing in May;
  • 12:00, German June economic sentiment index from ZEW;
  • 13:00, UK June industrial orders from the CBI;
  • 16:00, ECB’s Draghi speaking;
  • 17:00, Fed’s Yellen speaking.
Technical Analysis:

Intraday forecast: minimum: 1.1303, maximum: 1.1383, close: 1.1359.
eur_210616.png


Euro/dollar rate on the hourly. Source: TradingView

A fall in rate meant the euro stopped at the 45 and 67 degrees. The AO indicator has offloaded. We just need the oscillator stochastic to return to the buy zone and then we can start a new growth phase.

The rate is now at 1.1330. If we make a line along the minimums then we get a support. I don’t think it will hold and the rate will drop to 1.1303. I expect the euro to strengthen to 1.1383 from it. I’m putting more on a softly worded speech from Yellen at 17:00 EET. A weakening of the euro to 1.1276 will cancel my growth forecast. A pinbar has formed on the daily. I’m still not taking it into consideration while the pound hasn’t weakened.
 

Alpari

Active Trader
Jul 6, 2015
271
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Euro and Pound Strengthening on Referendum Day

Previous:

Expectations for yesterday’s bottom rang true. The euro/dollar restored from a 1.1236 minimum to 1.1337 (1.1316 target). The euro/dollar and pound/dollar lifted before results from a survey from Opinium came out showing a rise in Brexit supporters. Due to this, the euro/dollar crumbled from 1.1337 to 1.1269. After more new survey results were published, the euro/dollar shifted the maximum to 1.1349.

Market Expectations:

All eyes are on the UK referendum today. The contradictory Brexit surveys from May are not letting trades run smoothly (I’m not talking about intraday trading). Tomorrow after the results of the voting are out we will see attention switch: this time attention will once again be on the US and the Fed rates.

The voting will take place until midnight EET. I don’t think it’s worth making a forecast today on the day of the referendum. I have marked out only a 1.1294 – 1.1375 price range in which I expect the euro to fluctuate until the preliminary results of the referendum are out.

Day’s News (EET):

  • 9:00 – 00:00, UK referendum;
  • 9:45 – 11:00, European indices for business activity in the manufacturing sector and service sector for France, Germany and the Eurozone;
  • 15:30, US unemployment benefit requests for week ending 18th June;
  • 16:45, US preliminary business activity index in manufacturing during June;
  • 17:00, US new housing sales in May and CB’s leading indicator index for May.
Technical Analysis:

Intraday forecast: minimum: 1.1236, maximum: 1.1316, close: 1.1296.
eur_230616.png


Euro/dollar rate on the hourly. Source: TradingView

The euro bulls managed to bring the rate to 1.1337 without force whilst the Opinium survey had yet to be released. The euro is now trading for 1.1343 dollars. The growth slowed around the 67th degree. Due to the UK referendum I haven’t made a forecast.The road to 1.1368/75 is open on the hourly. I’ve marked out 1.1294 as a support.
 

Alpari

Active Trader
Jul 6, 2015
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Peak of Volatility Passed, Extended Flat Awaits

Previous:

After the Brexit vote the euro/dollar fell five figures (-4.51%) to 1.0911. As soon as the official results of the voting were out for all to see, the currency market began a correction phase.

The referendum has been and gone. The peak of volatility has passed and now an extended flat awaits. The rebound was 277 points. It’s not bad for a start. Now the price needs to return to the LB which passes through 1.1208.

Market Expectations:

Today is Monday. Mondays always see me looking at movements against those of Friday. If the euro weakened on Friday, that means I expect it to rise today. Since the intraday volatility on the market remains high, I expect to see a rollback to 1.1115. At the moments we could see a bounce to 1.1154.

Scotland’s First Minister Nicola Sturgeon announced that the nation intends to veto the Brexit results. Scotland is not happy with the fact that the UK is to leave the EU. The bigger the backlash, the less likely the UK will leave the EU. The referendum doesn’t have any legal authority; it is just a way for citizens to express their views on a certain subject. This is all the more important considering the slightness of the victory.

Day’s News (EET):

  • 15:30, US May goods balance of trade;
  • 16:45, US June preliminary service sector PMI;
  • 20:30, ECB’s Draghi to speak.
Technical Analysis:

Intraday forecast: minimum: 1.0982, maximum: 1.1118, close: 1.1065.

The euro/dollar is trading off the charts; below the MA of the D4. There is no important macroeconomic data planned for Monday, so I expect to see a correctional movement to the 112th degree. At 20:30 Draghi will speak. It will be interesting to hear what he thinks about the situation with the UK and what measures the bank is set to take.

eur_270616.png



Euro/dollar rate on the hourly. Source: TradingView
 

Alpari

Active Trader
Jul 6, 2015
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Euro Risks Falling to 1.1070

Previous:

The rise in the stock markets and the price of oil on Wednesday facilitated a strengthening of the commodity currencies and, via them, the euro. The price of Brent again surpassed the psychological $50.00 per barrel level.

A complex correctional formation has formed for the euro/dollar on the hourly. It will last a while whilst it’s not completed on the daily timeframe where it has only just begun.

Market Expectations:

I expect to see the day close down. There is only one meaningful event for me today: the ECB minutes for their monetary policy meeting which come out at 14:30 EET. After two days of the euro strengthening, a one-day correction is needed. The target for the close of the day is at 1.1070. A close below 1.1040 will put any further restoral of the euro into question.

Day’s News (EET):

  • 09:00, German May retail sales;
  • 10:00, Swiss June index for leading indicators from the Kof;
  • 10:55, German May unemployment changes;
  • 11:30, UK balance of payments, definitive GDP and business investment data for Q1 of 2016;
  • 12:00, Eurozone June preliminary CPI;
  • 14:30, ECB minutes for their monetary policy meeting;
  • 15:30, Canadian April GDP, May industrial goods price index;
  • 16:45, Chicago June business activity.
Technical Analysis:

Intraday forecast: minimum: 1.1070, maximum: 1.1127 (current day), close: 1.1076.
eur_300616.png


Euro/dollar rate on the hourly. Source: TradingView

My yesterday’s expectations of a bottoming out rang true. The euro/dollar restored to 1.1130. At 7:17 EET the price was 1.1101. I reckon today has a rise to 1.1166 on the cards, but the week’s patterns (the window of 5 trading days) due to the historical data have forced me to go against it. The indicators aren’t looking to ripe for a break either. With the AO in such a state, it’s possible we’ll see an unsuccessful test of 1.1130 and a fall.

I reckon that today would be better for the price to sit in a 1.1070-1.1130 corridor. If the euro strengthens above 1.1130, on Friday I will consider a further strengthening of the euro against the USD. The bullish trend is forming without any sharp rises or falls so that the bulls will be able to fully cover the fall from Brexit. A perseverance of the upward trend – 70 points per day – will see the buyers win back their losses by 11th – 12th July. A close of the day below 1.1040 will put further strengthening of the euro in doubt.
 

Alpari

Active Trader
Jul 6, 2015
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Euro Expected to Strengthen

Previous:

The downward correction on Thursday went deeper than expected. After a renewal of the session maximum, the euro corrected to 1.1024 (forecasted: 1.1070). A sharp rebound was caused by a weakening of the pound after the BoE’s Mark Carney spoke. He promised to loosen UK monetary policy after summer.

During Carney’s speech, the pound/dollar crumbled two figures, whilst the euro/dollar fell just one. The euro was held from weakening by the euro/pound cross rate. By the close of the day, the price had restored to 1.11 from 1.1024.

Market Expectations:

Today is Friday; an unpredictable day. Due to this, I expect the euro to yoyo. I wouldn’t count out the euro returning to 1.1060 before it starts strengthening. I expect it to revive to 1.1143. If Norway starts striking and oil lifts above $51, the target will lift to 1.1180.

Day’s News (EET):

  • From 10:15 to 11:00, June PMI data for Spain, Italy, Germany and the Eurozone;
  • 10:15, Swiss May retail sales;
  • 10:30, Swiss PMI in the manufacturing sector for June;
  • 11:30, UK PMI in the manufacturing sector for June;
  • 12:00, Eurozone May unemployment level;
  • 16:45, US PMI in the manufacturing sector for June;
  • 17:00, US June business activity in the manufacturing sector and June PMI from ISM;
  • 23:00, operative extraction rig data from Baker Hughes.
Technical Analysis:

Intraday forecast: minimum: 1.1060, maximum: 1.1143, close: 1.1114.
eur_010716.png


Euro/dollar rate on the hourly. Source: TradingView

Mark Carney managed to correct the euro to 1.1024. The euro was bought from here. The price returned to 1.11. The pair is currently trading at the LB (1.1093). This means that the pair is balanced on the hourly, with the price ready to stray. Since there were real swings yesterday, my forecast maximum of 1.1143 is below yesterday’s 1.1154 maximum. As I said above, if a barrel of Brent heads above $51, the target should be shifted from 1.1143 to 1.1180.
 

Alpari

Active Trader
Jul 6, 2015
271
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50/50 for Euro

Previous:

Monday’s euro trades were calm. My market expectations rang true in full. The euro/dollar rate dropped to 1.1097 in the first half of the day and restored to 1.1159 in the second half. US stock markets were closed due to it being Independence Day. Trader volumes and activity were low.

Market Expectations:

The euro/dollar fell to 1.1124 in Asia. The price bounced off the LB and at 7:14 EET was trading at around 1.1134. I expect it to fall to 1.1105 with a rebound to 1.1153. Expect sharp fluctuations at 12:30 EET when the BoE publishes its financial stability report and Mark Carney speaks. This will have a direct effect on the pound and an effect on the euro/dollar via the euro/pound cross.

Day’s News (EET):

  • 10:15 – 11:00 EET, European service sector business activity indices for June (Spain, Italy, France, Germany and the Eurozone);
  • 11:30, UK service sector business activity indices for June;
  • 12:00, Eurozone May retail sales;
  • 12:30, BoE’s Mark Carney to speak and financial stability report;
  • 17:00, US May industrial orders;
  • 21:30, FOMC’s Dudley to speak.
Technical Analysis:

Intraday forecast: minimum: 1.1105, maximum: 1.1153, close: 1.1145.
eur_050716.png


Euro/dollar rate on the hourly. Source: TradingView

We can see that the price has pierced the LB over the last two days on the hourly. Without making it to the 67th degree, the price bounced off upwards. Now it is at the LB. I expect it to fall to 1.1105. I think that for us to go higher we need the AO indicator to switch negative. If the price does so then on Wednesday we could see further strengthening of the euro.
 

Alpari

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Euro at Inversion Zone

Previous:

The euro rate closed down against the USD. The crash of the GBP to a 31-year minimum raised demand for safe assets: JPY, gold and US state bonds. By the close of the day, the euro was at 1.1062 dollars and the pound was down against the dollar to levels unseen since 1985.

Market Expectations:

In Asia the pound/dollar fell to 1.2791. After a 4% fall it tried to muster a fight back to 1.28. At 7:35 EET, the GBP was at 1.2882 dollars. Today is Wednesday. Trader attention will be on the US Fed minutes which are out at 21:00 EET. Then the attention will switch to the June US labour market report which is out at 15:30 EET on Friday.

On Wednesday the euro/dollar is expected to come out with a V formation with a minimum at 1.1028. It could be lower. Here we need to keep an eye on the euro/pound cross. If it starts correcting, the pound will be in a winning situation and it will start a correctional movement after yesterday’s crash. The resistance level is at 1.1088.

Day’s News (EET):

  • 11:10, business activity index in the retail sector for June.
  • 13:30, ECB’s Peter Pratt to speak;
  • 15:30, US and Canadian May external trend. ECB vice president Constancio to speak;
  • 16:45, US definitive service sector business activity index for June;
  • 17:00, US business activity throughout June in the non-manufacturing sector from ISM;
  • 18:00, ECB’s Mersch to speak;
  • 21:00, US Fed minutes.
Technical Analysis:

Intraday forecast: minimum: 1.1028, maximum: 1.1065, close: 1.1052.
eur_060716.png


Euro/dollar rate on the hourly. Source: TradingView

The LB couldn’t hold back the euro from falling. Due to a general strengthening of the USD, the euro fell to 1.1035, including today.

The price is in the zone between the 112th and 135th degrees. This is an inversion zone, so I expect a price rebound from the 135th degree. We could’ve said that a fall to 1.1027 is not going to take place, but the euro/pound is going to correct. If my conclusions turn out to be correct, it will pile pressure on the euro/dollar. In this case, the buyers will need to retreat. From here we could risk buying euro before Friday’s NFP. Moreover since it is being supported via the minimum from 30th June.
 

Alpari

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Euro Returned to 1.11

Previous:

The euro/dollar closed up on Wednesday. Trades were volatile due to US stats. The pair restored to 1.1087 and then again fell under pressure due to ISM data for the service sector. The ISM’s index showed a June rise from 52.9 to 56.5 (forecasted: 53.3).

The euro bulls managed to restore their losses quickly as everyone was waiting for the release of the Fed minutes. The regulator is ready to raise rates, although members of the FOMC believe that more economic data is needed to take such a decision. Since they were worried by the last labour market report, the June report will attract a lot of trader interest: more than in May. By the end of the day the euro/dollar rose to 1.1111.

Market Expectations:

In Asia on Thursday, the euro/dollar corrected to 1.1074. It was a typical technical correction. By now the euro is being quoted at Asia’s opening price. The euro’s important event of the day is the US private sector labour market data from ADP and the initial unemployment benefit applications made there. Taking yesterday’s ricochet from 1.1029 and the close of the day at 1.11 into account, today I expect to see a continuation of the rally to 1.1140/50.

Day’s News (EET):

  • 09:00, German May industrial production;
  • 10:00, Swiss National Bank June currency reserves;
  • 10:30, UK June housing price index from Halifax;
  • 11:30, UK production in the manufacturing sector and industrial production for May;
  • 15:15, US NFP report from ADP for June;
  • 15:30, Canadian May construction permits, US unemployment benefit applications for the week ending 2nd July;
  • 17:00, Canadian June PMI from Ivey;
  • 17:00, UK NIESR GDP forecast;
  • 18:00, US oil reserves for week ending 2nd July.
Technical Analysis:

Intraday forecast: minimum: 1.1074 (current Asian), maximum: 1.1140/50, close: 1.1126.
eur_070716.png


Euro/dollar rate on the hourly. Source: TradingView

The 135th degree has stood strong in the face of attacks from the buyers. The pair flipped into the 112-135 zones. Up to now the rebound is 67 degrees. The session minimum was shifted by 6 points, so I haven’t bothered calculating the new levels from 1.1029. We just need to add 6 points each to the current levels and that is it.

As we see, the euro’s strengthening stopped around the 67th degree at the LB. After the morning’s correction, the bulls are trying to update the maximum. I reckon that, if 1.1115 is reached, the euro/dollar will switch into a correction phase and the subsequent growth for the pair will continue during the American session. Whether the bulls reach the target level or not will depend on the ADP data and the unemployment benefit applications.
 

Alpari

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Oil Market: 29 June – 6 July
Last week, WTI futures plunged 6.4% to $46.31 per barrel. On 6th July the price of WTI crude oil reached a local bottom of $45.91 per barrel. The short-term downtrend was broken earlier, on 5th July, when the price dropped 4%. On 6th July the crude price was continuing to decline.

The weekly trend of Brent future contracts was the same as the WTI trend. The price of Brent declined 5.1% in the same period to $47.48/bbl. The price reached a local bottom ($47.01/bbl) on 6th July. On 22nd June, the price of Brent reached $51 per barrel, however, the price failed to remain above this level.

The petroleum market data in the US was ambiguous. Commercial oil stocks in the US fell by 4 million barrels, while the market expected the drop to be more than by 2.38 million barrels. However, the number of active drilling rigs rose by 11 units to 341 rigs. That information could be understood as an indicator of the future growth of oil production (especially of shale oil production) in the US.

We expect the price of Brent at the next week at the range of 46.7-49.5 USD per barrel, WTI could remain in a range of 45-46 USD per barrel.
 

Alpari

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Euro/dollar could shift to 1.1140

Previous:

Expectations of a bottoming out yesterday came off in full. The GBP corrected before the Bank of England convened. Due to a rise in the euro/pound, the euro/dollar rose to 1.1119.

Market Expectations:

The euro continued to rise in Asia 17 points against the dollar. It would be better for the pair to consolidate than to try and rise during the Asian session. A fright may be caused due to a possible euro weakening against the dollar from trade opening.

The key event of today is the BoE meeting. If the Bank leaves the interest rate at 0.5%, the pound could strengthen against the dollar to 1.3480. The euro/pound cross will flip upside down, with the euro/dollar likely to fall. As per my forecast, I expect to see a rise in the pair to 1.1140. I’ve marked out two important levels as supports 1.1085 (LB at 11:00 EET) and 1.1066 (45 degrees).

Day’s News (EET):

  • 14:00, BoE interest rate decision (and votes for which) and asset purchasing program;
  • 15:30, Canadian primary housing market index for May. US June producer price index and unemployment benefit applications for the week ending 9th July;
  • 18:15, FOMC member Lockhart to speak;
  • 20:15, FOMC member George to speak.
Technical Analysis:

Intraday forecast: minimum: 1.1088 (current Asian), maximum: 1.1140, close: 1.1128.
eur_140716.png


Euro/dollar rate on the hourly. Source: TradingView

In European trades on Wednesday, the euro/dollar updated the minimum and restored 67 degrees to 1.1119 from 1.1041. The price is situated above the LB. The MA lines are set upwards. In line with my forecast, I reckon we’ll see a rise in the EURUSD to 1.1140, but I expect a break to 1.12.

The hourly indicators (AO, CCI and stochastic) aren’t set up right for a strengthening of the euro. This means that the flat on the pair could stretch all the way to 14:00 EET.
 

Alpari

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Euro/dollar: 1.1140 reached, now to 1.1176

Previous:

On Thursday the tone was set by the GBP after the BoE had convened. The Bank left interest rates unchanged at 0.5%. Their asset purchasing program was also left as was at 375 billion pounds. The pound strengthened throughout the market and then weakened since the MPC discussed the introduction of measures to stimulate the economy; measures expected to be introduced in August. The euro/dollar rose to 1.1164 and then stabilised at 1.1115. The 1.1140 calculated target was reached.

Market Expectations:

Today is Friday. There’s only Mark Carney’s speech which stands out today. The pound/dollar had shifted yesterday’s maximum from 1.3472 to 1.3475 by 7:27 EET. We could see a rise before the next BoE meeting. Yesterday’s pattern isn’t great for a euro strengthening, but if we take a look at how the pound’s been getting back to its feet, I’ll risk it and say we could be looking at a rise of the euro/dollar to 1.1176.

Day’s News (EET):

  • 11:30, UK construction completed in May;
  • 12:00, Eurozone definitive June CPI and May balance of trade;
  • 15:00 Carney to speak;
  • 15:30, US June CPI and retail sales, NY Fed’s index for business activity in manufacturing for July;
  • 16:15, US industrial production for June;
  • 16:30, CB’s May index for leading indicators in UK;
  • 17:00, US preliminary consumer sentiment for July from Michigan university.
Technical Analysis:

Intraday forecast: minimum: 1.1102 (current Asian), maximum: 1.1176, close: 1.1150.
eur_150716.png


Euro/dollar rate on the hourly. Source: TradingView

The euro/dollar has jumped to 1.1164 after the BoE met. The rise stopped near 112 degrees. After a correction, the pair spent several hours at 1.1115. The euro is slightly up in Asia. I’ve risked in my forecast going for a revival to 1.1176. Next week from Tuesday onwards we can target 1.1230 and 1.13.
 

Alpari

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Failed coup in Turkey, euro marching upwards

Previous:

On Friday the euro/dollar closed down. My euro expectations came off only for the first half of the day. The pair corrected to 1.1115, following which there was a bit of a bullish impulse which ran out of steam at 1.1148. After a bounce that didn’t last, a continuation of the euro’s strengthening was expected, but instead market participants started fixing profit from long positions before the weekend and before the release of US stats. Before trade close, the euro crumbled to 1.1024 when the Turkish general secretary declared a coup d’état was underway in the country.

Market Expectations:

The Turkish government managed to stop the uprising. From trade opening, the euro/dollar revived to 1.1064. Today is Monday and so, as per, I am looking at movement against that of Friday independent of any news that comes out. Since the euro weakened on Friday, today I say it will rise to 1.1103. I’m not writing off a rise in prices to 1.1120.

Day’s News (EET):

  • 11:15, BoE’s Martin Weale to speak on monetary policy;
  • 13:00, Bundesbank monthly report;
  • 15:30, foreign purchases of Canadian securities in May;
  • 17:00, US housing market in July from NAHB;
  • 23:00, USD net long-term securities purchases in May.
Technical Analysis:

Intraday forecast: minimum: 1.1044 (current Asian), maximum: 1.1103, close: 1.1092.

Due to the events in Turkey, the euro/dollar dropped to 1.1024. The situation in the country has stabilised, with the lira taking back 50% of its losses. The euro has restored to 1.1070.

My forecast is for movements against that of Friday. The 1.1103 target is near the LB. If the euro strengthening begins from trade opening, we can shift the target to under the trend line at 1.1120 (H1.1164 – H1.1.1148).
 

Alpari

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Euro/dollar trading at balance point

Previous:

The euro/dollar closed up 26 points on Monday. It updated its session maximum to 1.1083 and from there it dropped to 1.1063. The euro/pound cross was siding with the euro bulls, so the euro felt much better against the dollar than the pound.

So the euro/pound on the hourly broke the 0.8375 resistance and a session rally to 0.8420 is expected from there. Because of this, the euro/dollar should test 1.11. In my forecast I’ve indicated a forming of an upward triangle.

Market Expectations:

It’s unlikely we’ll see a shift above 1.1115 since market participant attention this week is on the ECB meeting and Draghi holding a press conference. It’s expected that the ECB’s monetary policy will remain unchanged, but Draghi may cause a bit of a kafuffle on the market.

Day’s News (EET):

  • 11:30, UK CPI, PMI, RPI and housing price indices for May;
  • 12:00, German and Eurozone economic sentiment in July from ZEW;
  • 15:30, US construction permits issued in June and foundations lain for the month;
  • 17:05, BoE’s Broadbent to speak;
  • 23:35, API US oil reserves.
Technical Analysis:

Intraday forecast: minimum: 1.1058, maximum: 1.1100, close: 1.1058.
eur_190716.png


The situation in Turkey has shifted from the headlines. The euro/dollar has restored to the LB. The pair is balanced on the hourly and the price is readying to diverge by at least 0.61% from the balance line.

I reckon we’ll see an upward triangle form for the pair today. Due to a rise in the euro/pound to 0.8420, I’m expecting to see a test of 1.1100/1.1103 from the euro dollar, with a subsequent recoil to 1.1060.

If the euro lowers the 1.1063 Asian minimum without any growth, expect the formation of a V-shaped pattern: a fall to 1.1047/45 and a return of the rate to 1.1078/80. The euro/dollar will sit in a sideways until the ECB convenes.