Trading on the EUR/USD pair closed down on Tuesday. Demand for the US currency was linked to some technical factors. The rate, having broken the support and trend line at the 1.0705 level, further fell to the 1.0656 mark.
In the second half of the day, the US dollar weakened against the major currencies on the back of a fall in US bond yields. The euro restored from 1.0656 to 1.0706.
As for trading in Asia, the EUR/USD pair gives a mixed picture. The rate is hovering around the 1.0682 level. As markets open in Europe the rate is likely to slide back to around 1.0660. I'm assuming a test level of 1.0651 (90 degrees). From there I expect an upwards correction to around 1.0715. Europe's economic calendar is empty today, so the directions of major pairs will depend on the dynamics of US bond yields.
Day's news (GMT 3):
- 16:00 UK: MPC member Cunliffe speech;
- 16:15 Canada: housing starts (Jan);
- 18:30 USA: EIA crude oil stocks change (Feb 3);
- 21:00 USA: 10-year note auction;
- 23:00 New Zealand: monetary policy statement;
- EU economic forecast.
EURUSD rate on the hourly. Source: TradingView
Intraday forecast: low: 1.0659, high: 1.0713, close: 1.0699.
Buyers executed yesterday what I was expecting to see today (Wednesday). After breaking through the trend line, the EUR/USD rate slid further to 1.0656. Now speculators will be using the rebound to build long positions.
In today's forecast, I'm relying mostly on cyclical analysis. Yesterday's rebound happened from the 90th degree on the back of a fall in US bond yields. In the first half of the day, I'm expecting the euro to fall to 1.0659. At 12:00 EET, according to the cycle, there should be an upwards correction to 1.0713/15. So, for Wednesday I think that the EUR/USD pair will oscillate between the 90th and 45th degrees. Europe's economic calendar is bare.