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EUR/USD: rebound expected from 45 degrees

Previous:

On Monday the euro/dollar closed down. Due to a general strengthening of the USD, the EUR fell to 1.1205. The euro is following the pound in its fall and the GBP lost out after UK PM, Theresa May, spoke yesterday.

Market expectations:

In Asia the euro fell to 1.1197. The euro fell under pressure after an RBA meeting in the EUR/AUD and EUR/NZD crosses. The Aussie central bank kept its base rate at 1.5%. I think that the situation is now stabilising and, after a correction, it will start to work off Friday’s pinbar. For today I have two targets: 1.1217 (LB) and 1.1214 (yesterday’s maximums’ zone).

Day’s News (GMT 3):

  • 11:30, UK PMI in the construction sector for September;
  • 12:00, Eurozone PMI for August;
  • 15:30, ECB’s Peter Pratt to speak;
  • 15:05, FOMC’s Jeffrey Lacker to speak;
  • 18:00, BoE’s Michael Sanders to speak;
  • Price index from GlobalDairyTrade.

Technical Analysis:

Intraday forecast: minimum: 1.1194, maximum: 1.1241, close: 1.1231.

Euro/dollar rate on the hourly. Source: TradingView

From a 1.1215 maximum, the euro corrected by 45 degrees. If the reason for buying euro was Friday’s pinbar, then the bounce should be limited by the 45th degree. If the market is set to be a flat today, a fall in the price will continue to the 67th degree at 1.1171.

The oscillator stochastic is in the buy zone. The quick line is trying to intersect with the slow. A bullish trend is forming according to the CCI. This means that there’s nothing that should interfere with the price bouncing from the current level of 1.1197.

The euro/pound is being a menace for the euro/dollar. At the moment a triangle has formed on it. An exit from here should be an upwards one. However, yesterday there was also a triangle for the euro, but it didn’t come off and, after a period of consolidation, the euro/dollar fell to 1.1205.

I reckon Friday’s pinbar will come off and that, after a day off in Germany, Deutsche Bank shares won’t fall from trade opening. On Monday shares in the States fell 0.84% to $12.98.


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