By Vladislav Antonov, Alpari
On Tuesday the euro closed down. After a break in the support at 1.1330, the rate fell to 1.1302. From here a rebound was expected. Before the ECB”s Draghi spoke, the sellers chased the buyers back to 1.1285. A close of the hourly candle below 1.13 cancelled out any growth for the euro.
In his speech Draghi expressed concern for low inflation and hinted that the bank may take further stimulative measures. Such an announcement pushed the euro down to 1.1239.
The euro updated its session minimum in Asia and is currently trading in the green zone. The rate is at 1.1266. The European calendar is empty. High volatility is expected on the markets until the end of the week. It”s fortunate that the UK referendum is on a Thursday and not a weekend; otherwise we”d have big gaps.
For the past few days, speculators have been swinging the markets using Brexit survey data. As such, I expect to see a revival of the euro to 1.1316 by the end of the European session. Now we”ll take a look at the technical picture and why I”ve selected this exact level.
Day”s News (EET):
- 15:30, Canadian April retail sales;
- 16:00, SNB”s quarterly report;
- 17:00, Eurozone June consumer confidence;
- 17:00, Yellen to speak, secondary housing market sales during June for the US;
- 17:30, oil reserves for the week ending 18th June.
Intraday forecast: minimum: 1.1236, maximum: 1.1316, close: 1.1296.
Euro/dollar rate on the hourly. Source: TradingView
It”s not the first time I say that the euro/dollar”s inversion zone is between the 112 and 135 degrees. A definitive triangle has formed at the 112th Gann degree. The depart from it was upwards. The price has restored to 1.1265.
Since the economic calendar is empty, trades in Europe should see a strengthening of the euro against the dollar to the 45th degree at 1.1289. If the restoral goes to plan, I expect to see a return of the price to the trend line at 1.1316 by the close of the European session. This level is boosted by the 67th degree and the balance line will also be there by this evening. Growth to cancel with a close of the hourly candle below 1.1236.
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Article submitted by Alpari.com