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On Monday the euro/dollar closed down. The buyers didn’t manage to hold at 1.0415. After Yellen spoke, the euro fell to 1.0393. The Fed chief announced that employment growth in the country was at its highest for the past ten years. Her announcement was taken by traders to mean that the regulator plans to raise interest rates further in 2017.
The US elections confirm Donald Trump as the president-elect, but this announcement from Yellen was even more important than that for the markets.
Market expectations:
For me the situation is contradictory since there is an overall setup of the players for a weakening of the euro, with cyclical analysis indicating a continuation of the upward correction. As I see it, the euro may well rapidly return to 1.0470 (67 degrees), just as it may well fall to 1.0351 (112 degrees). The economic calendar is empty. As such, we should use technical signals to enter the market.
Day’s News (GMT+3):
- 10:00, Swiss balance of trade and German manufacturing price index in November;
- 12:00, Eurozone October balance of trade;
- 14:00, UK retail and wholesale figures from the CBI for December;
- 16:30, Canadian wholesale figures for October.
Technical Analysis:
Euro/ rate on the hourly. Source: TradingView dollar
Intraday forecast: minimum: n/a, maximum: n/a, close: n/a.
From a maximum of 1.0478, the euro has slid to 1.0393. Who knows what would’ve been had Yellen not spoken: the price may well have stayed put at the balance line. From the 67th degree the price fell by 67 degrees. If we take into account that there is a bearish trend on the euro, we may well see a close of the day at around 1.0351.
I haven’t bothered with a forecast this Tuesday since the cyclical analysis is indicating an upward correction. Here we need to either wait for a flat against the cycles heading upwards whilst they’re not flipped southbound, either there will be a bounce from the 67th degree.
If we take a look at how the euro fell from a peak of 1.0479, the downward movement doesn’t take hold of one impulse wave. It could hit 1.0377. There’s no important news today, so use the technical indicators when looking to enter the market.
ALPARI
