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Expected Extension of Correction to 1.1320

Previous:

On Monday the euro closed up against the American dollar. By the close of the American session, the price had corrected from a 1.1232 minimum to 1.1278. From here the bulls lost all of their profit when the market saw information from a new Brexit survey. The survey indicated a rise in those wanting to stay in the EU. The pound/dollar lifted by 150 points to 1.4319. The euro/pound cross dropped 60 points to 0.7882. The euro/dollar dropped to 1.1237. The Guardian later went against the first survey from the ICM, saying that those in favour of Brexit are at 53%.

Due to a restoral of the crosses, the euro bulls managed to lift to 1.1302.

Market Expectations:

After yesterday’s growth by 65 points, a symmetrical triangle formed on the hourly. The triangle is a figure of the rally extension. Due to this I reckon we’ll see a strengthening of the euro to 1.1320. If the pound doesn’t weaken against the dollar today, we really could see the rate drop to 1.1338. There’s no planned significant news which could rock the market.

Day’s News (EET):

  • 11:30,UK CPI, PMI, RPI in May;
  • 12:00, Eurozone Q1 2016 employment changes and April industrial production;
  • 15:30, US retail sales without cars in May.

Technical Analysis:

Intraday forecast: minimum: 1.1285 (current Asian), maximum: 1.1320, close: 1.1304.

Euro/dollar rate on the hourly. Source: TradingView

The euro/dollar stopped in the zone between the 45th and 67th degrees. A symmetrical triangle is about to be completed. Although the AO indicator is in the positive, I think the price will head up since it is a figure of extension of the movement.

Before the FOMC meeting I don’t expect to see a significant strengthening of the euro. My target is 1.1320. The following price levels will be supports: 1.1275 and 1.1249. Growth to cancel with a close of the hourly candle below 1.1275.

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