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Old 02-07-2018, 05:07 PM
Josesv Josesv is offline
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Join Date: Jan 2018
Posts: 26
Default EURUSD: consolidating around the balance line

On Tuesday the 6th of February, trading on the euro/dollar pair closed slightly up. The euro dropped to 1.2315 before recovering to 1.2404 (+89). Turmoil on the US stock market subsided to help euro bulls recover their losses. At the end of the day, the indices closed between 1.7% and 2.3% up.

My expectations of a drop to the 135th degree came off perfectly. Now we turn our attention towards todayís session.

In my intraday forecast for the week running from the 5th to the 9th of February, Iíve got a phase of growth starting on Thursday. Since the low on this model has been reached, today we should see a reversal form.

Still, we shouldnít rule out the possibility of returning to 1.2340. With reversals, we can often see rather deep corrections. Moreover, the dollar is getting an extra boost from the growth in US 10Y bond yields.

Meanwhile, the fact that the political parties in Germany still havenít managed to form a government is weighing down on the euro. Talks were supposed to come to an end on Monday, but didnít. The parties are struggling to find a compromise.

In my forecast, Iím expecting a drop to 1.2365. The 45th degree is sitting at 1.2348. Since we have a mixed picture on the euro crosses, Iím allowing for the possibility of a drop to here. Buyers left a long tail on the daily candlestick. Since the session high was reached before the low, my forecast is predicting a breakout of the trend line, followed by a jump to 1.2426.

Iím not entertaining the idea of the euro going any higher than the 90th degree today given that the phase of growth isnít supposed to start until Thursday.
Source: https://alpari.com/en/analytics/currency/
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