With the European Central Bank rate hike by 0.75% and the release of good data on US GDP for the 3rd quarter, the euro collapsed by more than a figure, blocking the previous day’s growth. US GDP growth amounted to 2.6% y/y against the expectation of 2.4%, and this factor confirms the Federal Reserve’s message that the pace of rate hikes can be reduced. ECB President Christine Lagarde’s rhetoric was not “soft” (which was expected), but rather just neutral.
Trading volumes were high, positions were clearly being closed. But we still do not see an increase in euro sales volumes and, from the technical side, the price has not reached the target support of 0.9950, which together suggests that the price is preparing to go above 1.0050 and above the upper limit of the price channel, to the range of 1.0100/20, overcoming which opens the 1.0205 target.
Consolidating under 0.9950 may push the price to 0.9864 and a little lower to the MACD line of the daily scale. Getting the price to settle under the MACD line will be the final sign of taking the course for further decline (0.9520). Which scenario will the price choose? Despite the positive signals for the stock markets, the US stock index S&P 500 fell by 0.61% yesterday, and the index has been falling for two consecutive days, that is, investors are still leaving risky assets, which puts pressure on counter-dollar currencies.
This morning the entire Asia-Pacific region is in the red zone. In general, we are inclined to a scenario with a decline – we are waiting for the price to move under 0.9950 and further move towards 0.9864 with a test of the MACD line.
On the H4 chart, the signal line of the Marlin Oscillator made the first plunge under the zero line. Here there is synchronization with the price, which could not reach the support of 0.9950 on the first attempt. So, we are waiting for the development of events with the expectation of the euro’s decline.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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