Forex Analytics

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On Friday, trading on the euro/dollar pair closed up above 1.18. Before a sharp jump, the pair had fallen to the LB. The dollar fell across the market after US inflation data was published. Market participants took this slowdown in inflation growth to mean that a hike in interest rates this year has become less likely. On this news, the euro/dollar rate rose to the 1.1847 mark.

The CPI (Consumer Price Index) in the US for June grew by 0.1% (forecast: 0.2%, previous: 0.0%). The CPI excluding food and energy also grew by 0.1% (forecast: 0.2%, previous: 0.1%).

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Trading on the euro/dollar pair closed down on Monday. Sellers almost completely annulled Friday’s gains. The euro fell against the dollar to 1.1770, after which a phase of consolidation began. A growth in US bond yields provided support for the dollar, which was helped by a de-escalation in rhetoric from the US towards North Korea as well as demand for more risky assets. US 10Y bond yield rose to 2.228%.

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On Wednesday the 16th of August, trading on the euro closed in the black. The single currency was under intense pressure leading up to the release of the FOMC minutes. It first fell against the dollar after a report from Reuters that ECB president Mario Draghi wasn’t planning any significant monetary policy statement in the speech he’s set to give at the Jackson Hole symposium. Sellers later came into play after the publication of strong UK data.

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On Thursday the 17th of August, trading on the euro/dollar closed down. The daily candlestick closed with a range of 127 pips. The euro survived the ECB’s monetary policy meeting accounts. The price first jumped from 1.1663 to 1.1714. During the US session, the bulls managed to get it back up to 1.1754.

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On Friday the 25th of August, trading on the euro/dollar currency pair closed 1.02% up. Before Janet Yellen’s speech in Jackson Hole, the euro was trading around the LB balance line within a range of 1.1773 to 1.1828.

At the Federal Reserve’s annual conference, Yellen talked about financial stability and banking regulations. She gave no mention of monetary policy and there were no hints as to the likelihood of a further hike in interest rates this year. This triggered the opening of many short positions on the dollar. In its first growth spurt, the euro rose by 93 pips to 1.1890. After Draghi’s speech, this growth accelerated to reach 1.1941. The price then surged by another 60 pips.

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On Thursday the 31st of August, trading on the euro/dollar currency pair closed up. After dropping to 1.1823, the euro recovered 82 pips to reach 1.1905. I think that the pressure on the US dollar came more from the loonie than from the mixed US data.

The Canadian dollar rose by 1.6% against its US counterpart after the publication of Canadian GDP data. This acted as a driver for the other major currencies against the greenback. The GDP index grew by 0.3% over the course of the month, and 1.1% over the second quarter, its biggest rise in 6 years.

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On Friday the 1st of September, trading on the euro/dollar pair closed slightly up. Volatility increased after the US jobs report was published. 156,000 new jobs were added in the US outside the agricultural sector in August against a forecast of 180,000. The value for June was revised from 231,000 to 210,000 and for July from 209,000 to 189,000. The aggregate revision for the 2 months amounts to -41,000.

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On Monday the 4th of September, trading on the euro/dollar pair closed up. The rate went up as the dollar fell in the aftermath of North Korea’s nuclear bomb test. Since the US and Canada both celebrated Labor Day yesterday, banks and exchanges in these countries were all closed and so activity was low on the currency market in the second half of the day. During the US session, the euro/dollar rate stabilised around the 1.1900 mark.

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On Wednesday the 6th of September, trading on the euro/dollar pair closed slightly up (+9 pips). The price spent the whole day within a range of 1.1903 to 1.1950, staying within the 1st of September’s range of 1.1850 to 1.1980.

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On Monday the 2nd of October, trading on the euro/dollar pair closed down. The euro fell to 1.1730 against the dollar on the fallout from Catalonia’s independence referendum and a general strengthening of the dollar.

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On Tuesday the 3rd of October, the euro/dollar rate closed slightly up. Buyers managed to induce a rebound from 1.1696 on the back of some positive data from the Eurozone coupled with negative UK statistics. On the back of a jump on the euro/pound cross from 0.8822 to 0.8881, the euro/dollar bulls managed to bring the price up to 1.1737. I’ll outline the current market situation below.

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On Wednesday the 4th of October, trading on the euro closed up against the US dollar. The day turned out to be rather volatile, but market participants failed to determine the future direction of the pair.

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On Friday the 6th of October, trading on the euro closed up. Before the US data was released, the euro/dollar pair was trading within a 30-pip range of 1.1686 to 1.1716. Volatility on the pair surged as the NFP report was being published. The rate initially reacted with a 40-pip drop to 1.1670, followed by a 69-pip surge to 1.1739. These sharp fluctuations continued for a couple of hours before the pair entered a sideways trend.

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On Monday the 9th of October, trading on the euro/dollar pair closed slightly up. Before buyers decided to launch an assault on the B-B channel, they twice returned to the LB balance line. Given that exchanges were closed in the US and Canada due to national holidays, trader activity on the Forex market was low.

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On Tuesday the 10th of October, trading on the euro/dollar pair closed up. The euro rose from 1.1740 to 1.1826 against the greenback. German data, talk of reversing the ECB’s asset purchasing program, a weakening of the US dollar across the market, and a drop in US bond yields all provided support for the single currency.