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EURUSD: Euro trading at the balance line

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On Friday, the Euro was down at the end of the trading session. The Euro fell against the dollar to 1.1166 during trading in New York. After the news that Theresa May had agreed to a "supply and confidence" arrangement with the Democratic Unionist Party of Northern Ireland, as well as a slide in US bond yields, our pair restored to 1.1204.

Market expectations:

The Euro has started the week with an attempt to consolidate above 1.12. At the time of writing this review, the Euro was trading at 1.1208. The fight is taking place around the lb balance line. I'd like to note that in Asia, the Euro has been rising along with US bond yields. US 10Y bond yields have risen by 0.7% to 2.219%. If US bonds grow any further, the Euro will not be able to follow suit.

I'm allowing for a strengthening of the Euro up to 1.1225, but I'm expecting the session to close down. If the price immediately rebounds as trading gets underway in Europe, then we could see the rate fall as far as 1.1176. The calendar is empty, so I don't see Friday's minimum being updated.

Day's news (GMT 3):

  • 09:00 Japan: machine tools orders (May);
  • 11:30 Australia: RBS assistant governor Debelle's speech;
  • 20:35 Canada: BoC deputy governor Wilkins' speech;
  • 21:00 USA: monthly budget statement (May).

EURUSD rate on the hourly. Source: TradingView

Intraday forecast: low: 1.1194, high: 1.1225, close: 1.1194.

My expectations for Friday rang true. The Euro exchange rate reached its target of 1.1175. From a low of 1.1166, the pair restored to 1.1212, including Asia's trades. Price movement slowed down around the lb balance line. The price has stabilised on the hourly timeframe and is ready to stray from this line.

The economic calendar is empty. due to this, I'm expecting the rate to restore to the upper boundary of the downwards channel at 1.1225. I propose that we will see renewed selling from the 45th degree. Buyers have potential control over the situation. In order for buyers to take control, they need to consolidate at around 1.1125/35 level. Cycles on the hourly timeframe are reversing upwards such that my minimum is at 1.1195 and not 1.1175. It's hardly worth expecting any sharp fluctuations before the FOMC sits down.



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