EUR/USD: Bears Pushing Towards 1.1320

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On Thursday the 13th of December, trading on the euro closed slightly down. Volatility was high during ECB President Mario Draghi’s press conference. The EURUSD pair dropped to 1.1331 before recovering to 1.1393.

The meeting of the European Central Bank concluded with no changes to monetary policy and a downwards revision of GDP forecasts for 2018 and 2019. Mario Draghi explained the revised forecasts with reference to reduced external demand, geopolitical uncertainty, the ongoing global trade war, and increased financial market volatility.

Day’s news (GMT+3):

  • 11:15 France: Markit services PMI (Dec), Markit manufacturing PMI (Dec).
  • 11:30 Germany: Markit services PMI (Dec), Markit manufacturing PMI (Dec).
  • 12:00 Eurozone: Markit services PMI (Dec), Markit manufacturing PMI (Dec).
  • 16:30 US: retail sales (Nov).
  • 17:15 US: industrial production (Nov).
  • 17:45 US: Markit services PMI (Dec), Markit manufacturing PMI (Dec).
  • 21:00 US: Baker Hughes US oil rig count.

Fig 1. MA channel on the EURUSD hourly chart.

Current situation:

At the time of writing, the euro is trading at 1.1354 against the dollar. The pair is trading around the LB balance line. Considering that trading volume was at its highest during the drop, bears should defend the 1.1360 – 1.1387 range when the pair starts rising in order to hold onto their profits. However, they could let the rate rise in order to activate their pending sell orders before bringing it back down. In my forecast, I expect to see a jump to 1.1376 followed by a decline to 1.1320. The rate may drop without this initial rise. This may happen if the bears decide to top up their short positions.

Disclaimer: Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial ...

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