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Trading on the Euro/dollar pair closed down on Tuesday. In the space of two days from the 8th to 9th of May, the single currency fell by 158 pips (-1.43%) to 1.0863. The French presidential election is now being given secondary importance as trader attention turns back towards the US central bank. According to the latest data from CME Group’s FedWatch, futures contract prices put the probability of an interest rate hike by the Fed in June at 83.1%.
Market expectations:
Today (Wednesday), the economic calendar is empty. Mario Draghi’s speech, scheduled for 15:00 EET, shouldn’t have much of an effect on our currency pair. Draghi is often quite reserved in his statements.
When sellers managed to hold below 1.0940, they cancelled out the collapse of the resistance from the 4th of May. Pressure on the Euro increased until it reached the support at 1.0895. The support was formed from the consolidated minima from the 24th of April. As we can see, this too was unable to resist the pressure brought about by traders correcting their open positions after Emmanuel Macron’s victory. After the Euro fell to 1.0863, the market was once again reminded of the price gap.
Given that the weakening of the Euro from a high of 1.1021 stayed within 135 degrees, and that the trend line has been broken through in Asia, I’m predicting some correctional movement to the 45th degree at 1.0915.
Day’s news (GMT+3):
- 15:00 Eurozone: ECB president Mario Draghi’s speech;
- 15:30 USA: import price index (Apr);
- 17:30 USA: EIA crude oil stocks change (May 5);
- 19:00 USA: FOMC member Rosengren’s speech;
- 21:00 USA: monthly budget statement (Apr).
EURUSD rate on the hourly. Source: TradingView.
Intraday forecast: low: 1.0868, high: 1.0916, close: 1.0897.
After the French election, the Euro fell by 158 pips in the space of just two days. I’m not expecting a renewal of the maximum 1.1021 over the next 3 days. After an upwards correction, I expect to see a new wave of short positions on the Euro. Judging by the sentiment, sellers are ready to return the price to 1.0821 level (open gap).
