On Wednesday the 23rd of January, trading on the EURUSD pair closed up. In the first half of the day, the pair was held back by cross pairs. During the US session, the pair rose to 1.1394 amid growing interest in assets with risk involved and an overall weakening of the US dollar.
The demand for assets with risk involved increased on the statements of White House chief economist Kevin Hassett, who expressed confidence that the US and China will conclude a trade agreement before the 1st of March.
Also, demand for the dollar declined over concerns among investors about the ongoing partial cessation of US government funding. Hassett said that if the government shutdown continues through March, then we can expect zero growth for the first quarter. The losses due to the shutdown are many times greater than the amount requested for the construction of a wall between the United States and Mexico. Hassett estimates losses at $1.2 billion per week.
Euro growth was modest before the ECB meeting and Draghi's press conference.
Fig 1. EURUSD hourly chart.
Day's news (GMT 3):
- 11:15 France: manufacturing PMI (Jan), services PMI (Jan).
- 11:30 Germany: manufacturing PMI (Jan), services PMI (Jan).
- 12:00 Eurozone: manufacturing PMI (Jan), services PMI (Jan).
- 14:45 Eurozone: ECB interest rate decision.
- 16:30 Eurozone: ECB press conference.
- 16:30 US: initial jobless claims.
- 17:45 US: manufacturing PMI (Jan), services PMI (Jan).
- 19:00 US: EIA weekly distillates stocks.
Growth expectations were met. Before the ECB meeting, there was a correction on the euro to 1.1394. Growth stopped at 45 degrees, after which the market moved into the consolidation phase.
At the time of writing, the euro is trading at 1.1379. Today there will be no forecast due to Draghi's press conference, which could send the currency in any direction. You should refrain from using technical analysis until his speech ends. TA will be more effective after the press conference. I believe the price will slide to 1.1371 by 15:45 (GMT 3).