Alpari - Analytics

Alpari

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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.

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.



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