On Wednesday the 16th of January, the euro fell slightly against the US dollar and the British pound. It remained under pressure following the comments of ECB head Mario Draghi, who told the European Parliament that the recent economic performance of the eurozone was worse than expected, and that the economy still needs substantial stimulation in the face of uncertain external factors. Market participants considered the fact that the regulator could extend the QE program a red flag.
In addition to Draghi, the euro was under pressure from EURGBP. Traders were cautious in anticipation of a no confidence vote in the British government led by Teresa May. As a result of the vote, May won with 325 votes ‘for’, and 306 votes ‘against’.
Day’s news (GMT+3):
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- 13:00 Eurozone: CPI (Dec).
- 14:00 US: OPEC monthly report.
- 16:30 US: Philadelphia Fed Manufacturing Survey (Jan), building permits (Dec), housing starts (Dec), initial jobless claims.
The growth of the EURUSD currency pair was limited to 1.1425. Buyers did not reach the 45th degree. External factors forced many out of long positions that opened in anticipation of an upward correction.
As for today, I did not make a forecast because my signalmen (analysis tools) indicate uncertainty. If you look at the price model and horizontal support, which was broken in the last hour, sellers moved to 1.1355. According to the daily chart, the trend line from the base of 1.1215 is passing through 1.1330. Given that the US dollar is trading up against all major currencies except the yen, we know where to expect a rebound.