On Wednesday the euro dollar restored to 1.0768 on the back of a rise in the euro/pound cross. The cross didn’t hinder the key pair during the European session. My expectations for the market rang true.
In Asia the euro rose to 1.0785 against the dollar. The euro has been in a correction phase since 24th November, strengthening in a W-shaped pattern. Today the pair’s key events are the ECB meeting and Draghi holding a press conference. I never bother with a forecast when Draghi holds press conferences. It’s not clear what the head of the ECB will say after the Bank has convened. It would be decent if the price hits around 1.0733-1.0742 by the start of the press conference. The first level is the 45th Gann degree and the second is the LB.
Day’s News (GMT 3):
- 15:45, ECB December interest rate decision;
- 16:15, Canadian construction started in November;
- 16:30, Canadian construction permits issued in October, primary market house price index for October, economic capacity usage in Q3 of 2016, ECB press conference and US unemployment benefit applications for the week ending 3rd December;
- 18:30, US gas reserves for the week ending 3rd December.
Euro/ rate on the hourly. Source: TradingView dollar
Intraday forecast: minimum: n/a, maximum: n/a, close: n/a.
The euro/dollar rose from the LB to 1.0785. The growth stopped in Asia at the 67th degree. If we go off a mirrored W-shaped pattern from 1.0796, the growth should continue to 1.0796/1.0800. If we take today’s press conference and expectations regarding an extension of QE into account, the rate should return to around 1.0733-1.0742. The first level is the 45th Gann degree and the second is the LB. 1.0800 is 30 full cycles along 360 degrees. This is a powerful level both from a technical point of view and from a psychological one as it is a round number.
I never bother with a forecast when Draghi holds press conferences. He is unpredictable and it’s never clear what questions he will be asked. If the euro rises in Asia, it’s highly likely that it will fall in Europe.