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EURUSD: new high likely before any deep correction

On Monday the 30th of December, the euro was 23 points up at the end of trading ( 0.20%). The US dollar has remained under pressure throughout the holiday season. The euro rose to 1.1211 in Asian trading and resumed its growth up to 1.1221 in the US session.

Day’s events (GMT 3):

  • 17:00 USA: S&P/Case-Shiller Home Price Indices (YoY) (Oct).
  • 17:45 USA: Housing Price Index (MoM) (Oct).
  • 18:00 USA: Consumer Confidence.

Рис. 1

Current situation:

After hitting a new high, the price consolidated within a narrow range for 14 hours. The market remains optimistic about the US-China trade deal. According to reports, Liu He, China's Vice Premier, will visit Washington over the weekend to sign an agreement. Market activity has calmed down around news concerning the trade deal, so after the New Year, market players will shift their focus to Brexit.

On Tuesday, the news calendar offers up two housing price indices and the consumer confidence indicator out of the US. Many traders and investors left their positions before Christmas. We believe that reactions to the publication of these statistics should not be expected.

According to the forecast, we expect multidirectional dynamics from the euro: a decline to 1.1190 with a subsequent increase to 1.1223. The pair is technically ready for correction, but since the market is thin, it is more profitable to consider the continuation of upwards movement rather than a decline in value.

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