Fall in Euro; Fall in Volumes

Previous:

The euro/dollar on Monday closed doji. This is a candle whose closing price is the same as that of the opening. A spike in volatility took place on the American session when Yellen spoke.

Yellen said that the labour market data gives the central bank cause for concern, but they won”t rush to make conclusions based on one report. On the whole the labour market situation is decent: unemployment benefit numbers are low and wage growth should push up inflation. A further gradual increase in the interest rate will take place if the labour market improves and there is inflation growth.

At the beginning of her speech the euro/dollar fell to 1.1325. Then the pair was trading for around half an hour at 1.1360. Having updated the day”s maximum, the rate returned to 1.1350.

Market Expectations:

On Tuesday the news is less than ample. If the USD can”t pick itself back up after Yellen”s speech, this means we should expect another wave of weakening. Since the euro is fighting up at the top of the MA channel after Friday”s rally, I”m limiting the strengthening to 1.1406. The sharper the bounce from 1.1406, the higher the likelihood of a correctional movement to 1.1320 on Wednesday and to 1.1250 on Thursday.

Day”s News (EET):

  • 12:00, Eurozone reassessed GDP for Q1 of 2016;
  • 17:00: Canadian business activity index for May from Ivey;
  • 23:35, weekly oil reserve report from the API.

Technical Analysis:

Intraday forecast: minimum: 1.1339, maximum: 1.1406, close: 1.1368.

Euro/dollar rate on the hourly. Source: TradingView

The euro/dollar spent pretty much all day by the U3. According to the AO and CCI indicators, bull divergence has formed. Only the AO indicator is already above the zero line and the oscillator stochastic is in the buy zone.

There”s another important factor that”s worth attention. A fall in prices means a fall in trading volumes. This indicates that we are seeing an accumulation phase. Taking the factors listed above into account, I reckon the euro will weaken against the dollar to 1.1339 and then grow to 1.1406.

The distance between the 1.1373 and 1.1392 maximums is 21 hours. I expect to see three peaks by the U3. The third peak should form at 17:00 EET. My forecast will cancel if there”s a close of the hourly candle below 1.1324. If you”re buying euro, do so from the LB.

Earn from currency market fluctuations by investing in a Forex Investment Portfolio.

Source:: Fall in Euro; Fall in Volumes

About the Author
Alpari was founded in 1998 and is one of the world’s leading Forex brokers, offering clients a full package of the most modern financial instruments and technological solutions for online trading and investment. According to data from Finance Magnates, Alpari has been one of the largest Forex brokers in the world for a number of years. The trading turnover of the Alpari companies in 2014 was 2.5 trillion USD. Today Alpari is the world’s largest MetaTrader 4 Forex broker. The first half of 2015 saw company branches offering their services to over one million clients from over 150 countries in the world. Alpari clients have access to over 50 currency pairs and an extensive range of other instruments. The company offers the use of three trading platforms for computer and mobile applications for use with iOS and Android. Alpari is a member of international organizations such as The Financial Commission (Hong Kong) and CRFIN (Russia). Bonuses: the Alpari Bonus Program was launched in 2014 and allows clients to independently change their conditions for working on the financial market: reduce commission, save money on swaps, improve conversion rates and much more. Read More about Alpari HERE or you can visit their website direct by CLICKING HERE..

Related Posts

Leave a Reply

*