By Gabriel Ojimadu, Alpari
Expectations of a bottoming out yesterday came off in full. The GBP corrected before the Bank of England convened. Due to a rise in the euro/pound, the euro/dollar rose to 1.1119.
The euro continued to rise in Asia 17 points against the dollar. It would be better for the pair to consolidate than to try and rise during the Asian session. A fright may be caused due to a possible euro weakening against the dollar from trade opening.
The key event of today is the BoE meeting. If the Bank leaves the interest rate at 0.5%, the pound could strengthen against the dollar to 1.3480. The euro/pound cross will flip upside down, with the euro/dollar likely to fall. As per my forecast, I expect to see a rise in the pair to 1.1140. I”ve marked out two important levels as supports 1.1085 (LB at 11:00 EET) and 1.1066 (45 degrees).
Day”s News (EET):
- 14:00, BoE interest rate decision (and votes for which) and asset purchasing program;
- 15:30, Canadian primary housing market index for May. US June producer price index and unemployment benefit applications for the week ending 9th July;
- 18:15, FOMC member Lockhart to speak;
- 20:15, FOMC member George to speak.
Intraday forecast: minimum: 1.1088 (current Asian), maximum: 1.1140, close: 1.1128.
Euro/dollar rate on the hourly. Source: TradingView
In European trades on Wednesday, the euro/dollar updated the minimum and restored 67 degrees to 1.1119 from 1.1041. The price is situated above the LB. The MA lines are set upwards. In line with my forecast, I reckon we”ll see a rise in the EURUSD to 1.1140, but I expect a break to 1.12.
The hourly indicators (AO, CCI and stochastic) aren”t set up right for a strengthening of the euro. This means that the flat on the pair could stretch all the way to 14:00 EET.
Article submitted by Alpari.com