The euro/dollar fell to 1.1130 on Thursday following the UK pound. By the day”s close the buyers won back almost 70% of their losses. The price returned to 1.1251. The pair turned on a spindle due to news about the murder of British MP Jo Cox. The MP for Batley and Spen was attacked while holding a surgery with her constituents.
Due to this tragic incident, the Bank of England cancelled the speech that was to be given. Rumours then immediately appeared on the market that the referendum may be cancelled or moved to another date. All currencies strengthened against the dollar.
On Thursday the euro/dollar broke from the trend line. I do hope that the killer didn”t know technical analysis and how what he was to do would reflect on currency rates. Nevertheless, he changed the mood of those that were buying USD.
An inverted pinbar formed on the daily (candle with a long lower shade). For it to be activated, we need to strengthen above 1.1294. I”ve a break on the intraday graph today. The economic calendar is empty. For Friday I think a sideways under the trend line (H1.1415-H1.1294) in a 1.1235-1.1280 range is on the cards.
Day”s News (EET):
- 11:00, Eurozone balance of payments taking seasonal fluctuations into account in April;
- 15:30, Canadian May CPI. US construction permits issued and foundations lain in May;
- 18:00 ECB”s Draghi to speak;
- 20:00, Baker Hughes drilling rigs data;
- 20:05, BoC”s vice president Wilkins to speak.
Intraday forecast: minimum: 1.1235, maximum: 1.1280, close: 1.1252.
Euro/dollar rate on the hourly. Source: TradingView
The euro/dollar fell to the crossing of two lines: the first line passed through the 1.1232-1.1188 minimums and the second passed through 1.0516-1.0821. The additional strengthening zone at 1.1130-1.11140 is in place from the 135th degree.
To date the euro bulls have won back 80% of losses from yesterday”s fall to 1.1130. The price returned to the bearish trend line. From the minimum the pair”s growth was 112 degrees.
Taking into account that the calendar is empty this Friday, I expect to see euro fluctuations below the trend line. I reckon that a a triangle will form. I”ve not incorporated Draghi into my calculations since he has a powerful effect on the market only during the press conference given after the ECB meeting.
Despite the day”s pinbar, it”s unlikely that people want to aggressively buy euro before the weekend and the upcoming Brexit surveys. A strong resistance level is being formed by the 1.1298-1.13 levels. This is the region up to where the rate could reach without news and after a break in the trend line.
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Source:: Euro Breaks from Trend Line