EURUSD: the upward movement is nearing completion

Alpari Market Review
Alpari Market Review


On Tuesday, the 21st of August, trading on the euro closed up. The euro rose to close the day at 1.1601 amid a general weakening of the US dollar and a decline in US bond yields.

Market participants are trying to take US President Donald Trump’s latest statements seriously about the disagreement over the Fed‘s rate increase. I think there is speculation that the euro will be driven as high as possible in the run-up to the publication of the minutes of the FOMC meeting.

Day’s news (GMT+3):

15:30 Canada: retail sales (MoM) (Jun).

17:00 US: existing home sales (MoM) (Jul).

17:30 US: EIA crude oil stocks change (Aug 17).

21:00 US: FOMC minutes.

Fig 1. EURUSD hourly chart. Source: TradingView.

Current situation:

The U3 line remains a strong resistance for buyers. It currently deviated from the LB balance line by 1%. The rate has only recently started trading around this level. If profit-taking starts, it will shoot up to the Lb balance line. According to the forecast, I considered the formation of a third top. With this angle of upward movement, a return to 1.1601 will be enough for buyers to start closing their long positions.

There is no bearish divergence between the AO and AC indicators; therefore, I considered a strengthening of the euro up to 1.1630. I plan to short the euro from there. If the price goes according to the forecast and closes at 1.1567 or lower, then a pin bar will form in the next few days. You can stay in a short position up to 1.1495.

Today the minutes of the latest Fed meeting are set to be published. Bear in mind that the market has already factored in a rate hike. Everyone is interested to know how many more rate hikes there will be this year.

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