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Yesterday’s Trading:

The EUR/USD didn’t manage to stay by the LB on Wednesday. Before the FOMC minutes were published, the euro fell from 1.0691 to 1.0622. After the minutes came out, the euro bulls updated the seven month minimum.

There was nothing new in the minutes. The majority of the committee members expect the US labor market and inflation to create ripe conditions to put up rates in December.

Main news of the day (EET):

  • From 10:00 to 10:30, ECB representatives Weidman, Coure and Pratt to speak;
  • 11:30, UK October retail sales;
  • 14:30, ECB monetary policy report;
  • 15:30, US initial unemployment benefit applications;
  • 17:00, Philadelphia Fed’s November industrial index.

Market Expectations:

The ricochet from the 1.0616 minimum by 90 points shook the picture up not only on the hourly, but also on the daily. We’re not looking to sell euros in such a situation. As part of a correctional shift, I expect to see the rate head to the U3 at 1.0765.

Technical Analysis:

  • Intraday target maximum: 1.0765, minimum: 1.0654 (current Asian), close: 1.0730;
  • Intraday volatility for last 10 weeks: 103 points (4 figures).

The euro/dollar has updated its seven month minimum. The sellers didn’t make it below 1.0600, instead choosing to close short positions due to FOMC member disagreement on when to change interest rates. Yesterday’s 1.0691 maximum was broken, so I expect to see a further renewal of the euro. Since the oscillator stochastic is facing down and in Asia they’re selling dollars, in Europe I think we’ll see a fall of the rate to 1.0675 and then a growth to the U3 at 1.0765.

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