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Alpari.com December analysis EURUSD

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Old 06-12-2017, 02:13
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Default Alpari.com December analysis EURUSD

Alpari.com EURUSD: triangle beginning to take shape
On Monday the 4th of December, trading on the euro/dollar pair closed down. The euro and the pound spent the day under the influence of political factors. Volatility was high on pairs including the pound.

After dropping during the morning hours, the pound surged 100 pips against the dollar after reports of a breakthrough in Brexit negotiations concerning the UKís terms of exit from the EU. Accordingly, the euro came under pressure from this against the dollar via the euro/pound cross.

The pound then shed 120 pips against the dollar following a statement from European Commission President Jean-Claude Juncker. He said that they hadnít managed to reach a final agreement with the UK and that they would try to address all issues in time for the EU leadersí summit in mid-December. After this speech, the euro recovered from a low of 1.1829 to reach 1.1870 during todayís Asian session.

Yesterdayís predictions came off in full. The euro dropped from the trend line and has now returned to the balance line (sma 55). This didnít work out perfectly due to the volatility caused by political factors.

In Asia, the dollar is trading up against the pound (+0.07%) and the yen (+0.20%). On the crosses, the euro is trading down against the loonie (-0.01%) and Aussie (-0.64%). The main cross, the euro/pound, has appreciated by 0.13% to 0.8812. The price has broken out of the A-A channel. Sellers made it to the trend line, but prices closed above it, meaning the breakout wasnít confirmed.

Considering the factors mentioned above, my forecast for Tuesday has the euro rising against the dollar to 1.1911/27. A breakout of 1.1940 will cancel the triangle formation and open the way towards 1.2090. This scenario wonít play out if the hourly candlestick closes below 1.1835.

Remember that the dollar is currently being propped up by the US Senateís approval of the tax reform bill as well as the upcoming FOMC meeting.
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Old 12-12-2017, 03:19
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Default Re: Alpari.com December analysis EURUSD

The US employment data that came out on Friday wasnít bad. The US added 228,000 new nonfarm jobs in November against a forecast of 190,000. The reading for September was revised upwards from 18,000 to 38,000, while the October figure was revised downwards from 261,000 to 244,000. The aggregate revision comes to +3,000. US unemployment remains at 4.1%. The workforce participation rate is also unchanged at 62.7%.

The number of new jobs exceeded expectations, but markets couldnít ignore the weak level of growth or the revision of average hourly wages. The average hourly earnings index in the US came to 0.2% (forecast: 0.3%, previous reading revised from 0% to -0.1%).

The euroís rise was less down to the NFP and more to do with the growth on the euro/pound cross. The pound shed 0.67% in Fridayís session, with the yen losing 0.32% and the euro 0.03%. The franc and the Kiwi and Aussie dollar closed up.

At the time of writing, the euro is trading at 1.1784. The price is currently sitting at the upper boundary of the A-A channel on the 45th degree. The LB balance line (sma 55) runs through 1.1774. Considering the position of the hourly indicators and the lack of economic events today, Iím expecting the euro to drop to 1.1730 (45th degree). For now, I canít see the euro dropping any further than the 45th degree given that a pin bar has formed on the daily timeframe and the stochastic oscillator is reversing upwards.

Another important point Iíd like to draw your attention to is that the TR trend line drawn from 1.1935 has been broken through. Iím ignoring this for the moment because of the A-A channel. If the euro rebounds from the channelís upper boundary, this will confirm that it was a false breakout.

In theory we could drop as far as 1.1730 or lower. For now the main thing is to get back below 1.1770. Trading in London opens at 11:00 (GMT+3). Hopefully, the euro will open down when trading gets underway. This would keep buyers at bay while increasing the probability of a rebound from the upper boundary of the A-A channel.

The FOMC meeting is on Wednesday. Interest rates are expected to be raised by 25 base points. Congress has reached an agreement to extend federal funding through the 22nd of December. President Trump has already signed the bill.
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Old 15-12-2017, 00:03
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Default Re: Alpari.com December analysis EURUSD

EURUSD: central bank heads to determine pairís movements
On Wednesday the 13th of December, trading on the euro/dollar pair closed 80 pips up. The single currency initially rose against the dollar from 1.1730 to 1.1771 (+41) after consumer inflation data in the US was published and then rose from 1.1771 to 1.1826 (+55) after the FOMC meeting.

The FOMC meeting culminated in the decision to raise interest rates again by 25 base points. The federal funds rate now ranges from 1.25% to 1.50%.

The Fed is planning 3 rate hikes in 2018 and has expressed concerns over slowing inflation in the US. As Janet Yellen said, ďour understanding of the forces driving inflation isnít perfectĒ.

Since the current rate hike and a further three planned for 2018 are now built into the market price, traders are selling dollars en masse.

Wednesday turned out to be very volatile for global markets. The dollar retreated on all fronts. By the time the US session opened, the euro had dropped to 1.1730. Market participants were jittery ahead of the FOMC meeting.

After consumer inflation data was published, the first major wave of dollar sales took place. The FOMC meeting and Janet Yellenís speech led to even more sales. In the US session, the euro recovered to 1.1826. In Asia, the pair has reached the 1.1844 mark.

Three central banks have their meetings today. They are the Bank of England, Bank of Switzerland, and the European Central Bank. Traders will mostly be focused on the ECB and President Mario Draghiís subsequent press conference. I donít make forecasts on days when central banks meet and I donít trade. Because of the press conferences with the heads, these days are unpredictable.

Now letís see what we can expect from the euro from the technical side. Developments led buyers through the TR line (from 1.1812 high), before breaking the TR1 line (from 1.1961 high) after the FOMC meeting. The breakout of the TR1 intensified the W-model, which started forming after the breakout of the A-A channel. The targets for it are 1.1866 and 1.1881.

The EURUSD pair wonít pay any attention to technical factors during Mario Draghiís press conference. It could rise above the U3 MA line (1.1889) or just as easily return to 1.1765. No one knows what Draghi will say at the press conference and what journalists will ask him. I think that the most likely outcome is that the pair will move towards the 1.1881 mark.
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