Trading on the Euro closed up on Thursday. The price ricocheted after the publication of a new survey from YouGov. The survey shows that the gap between Labour and the Conservative has decreased and it is projected that the Conservatives may only win 304 seats in Parliament.
Another boost for the Euro was provided by a general weakening of the dollar, which came after Bloomberg reported that China plans to increase its purchases of US bonds. US bonds incurred some losses on this news, which in turn were passed on to the dollar. In the end, the apparent breakout of the trend line turned out to be a false one. The Euro rate closed at around 1.1285.
Tensions on the markets are growing by the day. Traders are bracing themselves for a series of important events due to take place on Thursday. These include the British parliamentary elections, the ECB meeting followed by a press conference with Mario Draghi, and former FBI director James Comey is set to testify to the US Senate about Russian interference in the US election.
There are no important statistical releases planned for today and the news block is fairly empty. The movements of currency pairs will be determined by opinion polls on the British election as well as rumours about what James Comey will say to the Senate. If we look at the technical side of the EUR/USD pair, everything points to a breakout of the 1.1285 resistance.
Day's news (GMT 3):
- 10:00 Switzerland: foreign currency reserves (Apr);
- 10:30 UK: Halifax house prices (May);
- 15:30 Canada: building permits (Apr);
- 17:30 USA: EIA crude oil stock change (2 Jun);
- 22:00 USA: consumer credit change (Apr).
EURUSD rate on the hourly. Source: TradingView
Intraday forecast: low: n/a, high: n/a, close: n/a.
The YouGov polls and rumours from China prevented a breakout of the trend line. This line now runs through 1.1285 level. The price rebounded from this and the lb. Now, buyers are once again aiming for 1.1285.
Yesterday, in the second half of the day, I imagined two scenarios. The first one was a downwards correction on the EUR/USD pair after a breakout of the trend line. The second was for the breakout of the trend line to be reversed. My forecast on the chart shows growth on our pair until the end of today's session. However, should the hourly candlestick close below 1.1240, I think this projection will become useless. If no one manages to stop the bulls after the European session opens, it's highly probable that we'll see 1.1308 level being tested.
Don't forget about all the events planned for Thursday. Technical analysis doesn't work when there's so much important news and so many rumours.