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EUR/USD: expected revival to balance line

Previous:

On Monday the euro/dollar fell from Friday’s 1.1142 maximum by 115 points. The USD strengthened throughout the market since just a day before the elections, the FBI ceased their investigations into Hillary Clinton. This unexpected decision allowed the dollar to shoot up and Hillary shot forward in the polls. A survey from Bloomberg puts Clinton ahead with 44% of the votes, whilst Trump is with 41%.

The growth of the US stock markets also was down to the likelihood that Clinton is set to be president. The Dow Jones rose 2.08% to 18259.60 points, whilst the NASDAQ rose by 2.38% to 5166.25 points and the S&P 500 rose 2.22% to 2131.52 points.

Market expectations:

The key event of the day for the market is the US presidential elections. Before the first results come in on Wednesday, 9th November, we are unliklely to see any real price movements. Market volatility will rise when these first results come in.

I’m not paying attention to the macroeconomic data today. In my forecast I’ve gone for a correction of the euro/dollar to the 45th degree at 1.1080. Taking into account that the LB during the American session will head through 1.1073, Perhaps my target won’t be reached. Today it’s worth being afraid of the media. Any rumours surrounding Trump could cause a crash of the dollar.

Day’s News (GMT 3):

  • 09:45, Swiss unemployment level for October;
  • 10:00, German September industrial production and balance of trade;
  • 12:30, UK September industrial production in the manufacturing sector;
  • 12:30, UK September industrial production;
  • 14:00, US small enterprise business activity in October from NFIB;
  • 16:15, Canadian construction began in October;
  • 16:30, Canadian construction permits issued in September;
  • 18:00, UK GDP forecast for October from NIESR and US vacancies opened in September from JOLTS;
  • 19:20, BoC’s Schembri to speak.

Technical Analysis:

Intraday forecast: minimum: 1.1030 (current Asian), maximum: 1.1080, close: 1.1055.

Euro/dollar rate on the hourly. Source: TradingView

The FBI has changed the direction of the euro/dollar. The euro/dollar dropped to 1.1027. From a 1.1142 maximum it was just over a 90 degree fall. Since the elections take place in the US today, I reckon there will be a correctional movement to the LB.

The inversion zone is between 1.0984 and 1.1010, so I’m saying there could be a weakening of the euro to the 112th degree. If we go off the hourly indicators: the growth should continue from the current level. A close of the hourly candle above 1.1050 will be a good sign for the euro bulls. Sales of the euro could renew from the balance line.



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