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EURUSD: a breakout of the trend line is expected

Summary:

On Thursday the 22nd of November, the euro closed slightly up. High volatility was observed during the European session in connection with the news on Brexit and Italy. The euro/dollar rate rose to 1.1434, after which it stabilised near the trend line at 1.14. Sellers did not pass through this trend line, as US markets were closed and volumes were lowered due to the holiday.

Day's news (GMT 3):

  • 10:00 Germany: GDP (Q3).
  • 11:15 France: Markit manufacturing PMI (Nov), Markit services PMI (Nov).
  • 16:30 Canada: CPI (Oct), retail sales (Sep).
  • 17:45 US: Markit manufacturing PMI (Nov), Markit services PMI (Nov)
  • 21:00 US: US Baker Hughes oil rig count.

1542960547

Fig 1. EURUSD hourly chart.

Current situation:

Despite the abundance of news on Brexit and Italy, yesterday's movement coincided with the forecast. I believe that the correctional model from 1.1359 ended at 1.1343. The price is close to the trend line. Considering the position of the stochastic oscillator in the sell zone and the CCI indicator crossing the level of 100 from the top, according to the forecast, I am expecting a breakout of the trend line and long positions to drop to the 45th degree. Since the US session today is short, in this thin market the decline may increase to 1.1354.


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