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EURUSD price action returned to the mean after rather dovish ECB minutes released earlier on today. The bank confirmed their concerns about the inflation, as they mentioned at the latest meeting. Why is it so surprising for the market? Novotny, after all has less to say than Draghi. I think the market wants ECB to kill QE and will react on any positive comments. The price remains in the mental range with no signs of any direction. Best to keep away
EURUSD traded higher for another session and closed the day at 1.267 after climbing as high as 1.2395. Draghi was hawkish this morning driving EUR higher while Trump was adding to the fire driving USD lower. It seems like the tensions around Russia, Syria and US have rather positive influence on the price of EURO. The price action remains in the range between 1.22 and 1.2420 with no clear indication of resolving in any direction. Bias remains to the upside towards 1.2550
DXY was as choppy as EURUSD. The price rebounded from the resistance at 90.20 and traded lower for a 2nd consecutive day. DXY is closing the session at the 20 ma and it is most likely to trade lower tomorrow. This is very bullish for EURUSD. Look out for China’s president speech this week to see what his position on Trade Wars and Trump’s response to it is. If the conflict extends, DXY will move lower.
The U.S. dollar traded higher against all of the major currencies today. It seems like the market liked the recovery in US Stocks a lot! Market awaits tomorrow’s NFP and earnings report. This is always an important release and the changes expected over the previous month are significant enough that a surprise in one direction or another. Expectations are for job growth to slow, which would be negative for the dollar but they also anticipate an improvement in the jobless rate and stronger average hourly earnings growth.
It looks like the price closed near the daily high and at the upper border of the tight range. This is very bullish sign and suggests, there is an upside potential. Long trades can be placed just above 1.4001 with stop losses just below today’s low at 1.4000. Targets set to 1.4350 resistance.
As I mentioned, I expect the rally to be capped at around this level. Given the today’s bar was sharp and engulfed 11 previous sessions, some more follow up is very likely. It looks like the deeper correction I anticipated is now underway. I will be looking for shorts at around 107.00 – 107.50 resistance.
DXY rallied on Kim Joun-un and higher than expected GDP which increased at an annual rate of 2.9% in the fourth quarter of 2017, according to Commerce’s Bureau of Economic Analysis (BEA). This is a good move above expectation by the trend is clearly to the downside. If market reacted to the expectation rather than to the overall trend, the hype is likely to fade quickly. This rally could be just a dead cat bounce rather than a reversal. I expect any upside to be limited and the price to eventually resume its downtrend.
The pair traded as low as 1.2371 but its closing the day at 1.2401 handle. EURUSD made a clear retracement down to the support in today’s session. The move was driven by softer than expected implication of Trade War with China. Its seems like China is ready to play the ball with Trump and back down. In my opinion its easier to wait his administration out than engage in a conflict. So far US is getting voluntary reduction of steel imports from Korea and China, which is the ultimate goal. Although the issue is still unresolved and might blow up, the risk is on so far this week. US Dollar got a boost from it, but the underlining trend is down.
DXY broke down. Index printed 2 down days and closed ta 88.60 tonight. A major support and multi-year low is not just 30 pips away and the price is looking very weak across all time frames. If is very likely that DXY will break the support and trade much lower in the next few months. There is no bottom really. Once we break the 88.30, it’s a no mans land with 84.00 eyed.
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