EUR/USD: Bounce From 1.0974 Highly Likely

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Euro trading on Tuesday finished down. The euro/dollar fell during the American session to 1.0970. The euro lost against the dollar and pound. The pound strengthened after the publication of inflation data from the UK which exceeded expected levels and lowered the need for the country’s central bank to drop their interest rate. Speculators are also trying their hand on rumours that the UK parliament might vote against leaving the EU. As a result, the euro was under pressure from the cross.

Market expectations:

The euro/dollar on the hourly is in a correctional phase. 1.0974 is a good support. Taking into account that bullish signals are forming on the old time frames, in my forecast I’ve gone for a revival of the price to 1.1022. Since many traders have long positions, the fall of the pair could reach 1.0962. Here we need to keep an eye on all cross pairs. If the euro isn’t being sold in them, 1.0974 should hold out.

Day’s News (GMT+3):

11:30, UK average wage index for August, unemployment benefit applications for September and August unemployment level;

15:30, construction permits issued and foundations lain in September;

17:00, BoC monetary policy report and interest rate statement;

17:30, Australian index for leading indicators from Conference Board in August, US oil reserve changes for week ending 16th October;

18:15, BoC press conference;

20:00, BoE’s head economist to speak;

21:00, release of US Fed’s Beige Book;

23:15, BoC’s governor to speak.

Technical Analysis:

Intraday forecast: minimum: 1.0975, maximum: 1.1022, close: 1.1010.

Euro/dollar rate on the hourly. Source: TradingView

The euro dropped to 1.0970 during the European session without updating the maximum. As I said above, the euro is under pressure from the euro/pound cross after the publication of UK inflation data. Market participants are also biting their nails before tomorrow’s ECB meeting and Mario Draghi speaking. They have no clue what decision the regulator will take with regards to QE.