EUR/USD trying to break from daily support

Previous:

After Friday’s payrolls, on Monday the euro/dollar corrected 72 points to 1.1131. The economic calendar was bare. In Canada and the US the markets were closed. The sellers weren’t stopped by anyone and managed to drag the price below the balance line on the hourly.

Market expectations:

On Tuesday there is also little news which could force the rates from the ranges that have formed. The euro/dollar has returned to the 1.1120 support. From here we could risk buying euro, but it really is risky. We could see a depart to the trend line at 1.1097.

In my forecast I have gone for a bounce to 1.1176. I reckon the price will remain above 1.1120 before the September FOMC minutes are out. After they’ve been released, we could see sharp price fluctuations on the market and the situation is unlikely to change until the US presidential elections are finished with.

Day’s News (GMT+3):

12:00, German and Eurozone October economic sentiment indices from ZEW;

13:00, US NFIB index for small business in September;

15:15, Canadian construction in September;

17:00, US labour market condition in September;

19:00, ECB’s Yves Mersch to speak;

21:00, monthly report on budget fulfilment.

Technical Analysis:

Intraday forecast: minimum: 1.1120 (current Asian), maximum: 1.1176, close: 1.1167.

Euro/dollar rate on the hourly. Source: TradingView

From a peak of 1.1205, the euro has corrected by 67 degrees. This is a strong support level for a price rebound. However, I have internal strife about my forecast not coming off. Take a look at the price fluctuations for 30th September and 4th October. After a sharp rise by one figure, the price then completely covered it and updated the minimums.

In Asia the price has returned to the 1.1120 support. Now the buyers are trying to break from it. At the time of writing this review, the euro is going for 1.1136. I won’t be buying on the market so as not to get burnt. We could see the pair hit the trend line at 1.1097.

On the graph I have marked out a head and shoulders pattern through which the price could head upwards. According to it, we need to see the euro restore to 1.1140/45. Buying euros wouldn’t be a bad idea following a rebound from 1.1130 since the trend line with a downward will be broken.

We could go another way though. After a test of 1.1140 and a rebound to 1.1130/35, we could whack a Buy Stop at 1.1145 with a stop under 1.1120. The minimum target for a bounce would be 1.1173 and in optimal conditions we could set it at 1.12.

Source:: EUR/USD trying to break from daily support

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