EURUSD: 1.1863
Preferred Strategy: The US$ remains under pressure following the FOMC Minutes, with the next directional move likely to come via tomorrow’s CPI figure. In the meantime, the momentum indicators are looking quite positive for the Euro, with the dailies are now pointing a little higher, suggesting that the downside will again be rather limited today. The neckline of the head/shoulder is at 1.1870, and we do not really want to head any higher for it to remain valid or there will be strong dollar liquidation which would see the Euro head towards 1.1900/1.2000. The downside currently looks underpinned at around 1.1800 although I would be surprised to see it trade down there again today. Overall, another range trade may be the plan for Thursday (1.1800/1.1900), but a daily close above 1.1870 would suggest that we are in for further dollar weakness in the days ahead. Taking a punt on the Head/Shoulder formation remaining intact: Sell EurUsd @ 1.1870. SL @ 1.1905, TP @ 1.1770.
| 24 Hour: Neutral | Medium Term: Neutral | ||
| Resistance | Support | ||
| 1.1930 | (61.8% of 1.2092/1.1669) | 1.1840 | Minor |
| 1.1920 | Descending trend resistance | 1.1825 | Minor |
| 1.1900 | Minor | 1.1795 | Session low |
| 1.1882 | (50% of 1.2092/1.1669) | 1.1760 | 200 HMA |
| 1.1867/70 | Session high /Neckline resistance | 1.1738 | 10 Oct low |
Economic data highlights will include:
EU Industrial Production, US PPI, Monthly Budget Statement, Jobless Claims, EIA Crude Oil Stocks Weekly Change , ECB Speakers; Praet, Draghi, Coeure & Lautenschlager
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