Euro/Dollar: Euro Still Under Pressure

Hourly

Yesterday’s Trading:

On Tuesday the US dollar was up against the euro. The currency’s strengthening slowed after weak US industrial manufacturing data came out. As soon as everything calmed down on the market, the euro again started to fall. The market stopped 30 points short of the 1.0600 level where we want it to be. This means that we should see a test of it today.

US industrial manufacturing for October was down 0.2% (forecasted: 0.1%, previous: -0.2%).

Main news of the day (EET):

• 15:00 – Fed representatives Lockhart, Mester and Dudley;

• 15:30 – US data on new housing and construction permits for October;

• 21:00 – Fed to publish FOMC minutes.

Market Expectations:

The USD is receiving support from growing expectations that the Fed will raise rates in December. Europe’s calendar is empty, so the sellers have a perfect opportunity to push the euro down to 1.0600 before the FOMC minutes are published.

Technical Analysis:

• Intraday target maximum: 1.0650, minimum: 1.0555, close: 1.0580;

• Intraday volatility for last 10 weeks: 103 points (4 figures).

The euro/dollar is trading between the D1 and D2. As soon as the stochastic slides to 50%, the sellers could fall silent. I’m sat in the bear camp. My target on the daily is still 1.0520. Before the FOMC minutes are published we should see a test of 1.0600. We’re likely to have seen a test of 1.0555/60 by the close of the day.

Daily

The euro/dollar is down to 1.0630. The oscillator stochastic is looking downwards, the CCI is below 100. The closest target is 1.0555/60 and then 1.0520. Now to the Weekly.

Weekly

I still expect the euro to reach 1.0520 (14/04/15 minimum) by the end of the week.