On Wednesday the 27th of June, the euro fell by 93 pips against the dollar to 1.1553. The fall of the euro/dollar pair was due to the overall strengthening of the US currency, despite the decline in 10-year US Treasury bond yields and weak statistics. The dollar was supported by reports that the White House could soften its stance regarding the limit on Chinese investments in the US. It didn't occur to me that the euro would drop below 1.16, so I was not prepared at all, as I thought that it would last for several days.
Day's news (GMT 3):
- 11:00 Eurozone: economic bulletin.
- 12:00 Eurozone: consumer confidence (Jul), industrial confidence (Jun), economic sentiment indicator (Jun), business climate (Jun).
- 15:00 Germany: consumer price index (YoY) (Jun).
- 15:30 US: gross domestic product annualised (Q1), initial jobless claims (Jun 22).
- 16:30 UK: MPC member Haldane speech.
- 17:45 US: Fed's Bullard speech.
- 19:00 US: FOMC member Bostic speech.
Fig 1. EURUSD hourly chart. Source: TradingView
The euro fell to the D3 MA line from the LB balance line. During trading in Asia, quotes fell to 1.1527. I believe that the pressure on the euro in the European session will continue, and sellers today will try to return to the low of 1.1518 (21 June).
According to the forecast, the euro is expected to weaken to 1.1504 (180 degrees). I don't foresee it falling any lower, since a bullish divergence has appeared between the AO indicator and the price. The pair could undergo an upwards correction from its current level.
A surge in market volatility is expected at 11:00 and 15:00 (GMT 3). An economic bulletin from the ECB will be issued at 11:00. At 15:00, Germany will publish its consumer price index for June. From D3, it would be nice to go back to LB, which is now far away at 1.1632, however the pair will close at around 1.1585.