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EUR/USD may pull back ahead of ECB and FOMC

al_dcdemo Posted 21 Nov. as Analysis on EUR/USD, Target: 1.0975, Date: 1st of January, 12:00 GMT  in #Technical analysis #EUR/USD #Breakdown #Bounce #Downtrend #Bearish Bias #Channel Line #Dip Buyers #Upward Sloping Channel #Divergent Monetary Policies
Monthly chart
The pair has been in downtrend since May 2014. After it broke below the longer-term trendline that supports lows of years 2005, 2010 and 2012, a series of important levels gave way, including 2012, 2010 and 2005 lows. The levels were falling like dominoes before the rout finally stalled near the declining channel-line drawn off 2008 and 2010 lows and the long term trendline that connects 1985 and 2000 lows.
Weekly chart
The low was put in place at 1.0462 after stops below 1.05 wer…
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al_dcdemo 4 Dec.

UPDATE 5: ECB cut the deposit rate to -0.30% (from -0.20%) and extended QE program to March 2017 (from September 2016) which was well short of expectations. Given the reaction it seems that the market might have been pricing in a cut to -0.40% and an expansion of QE. Long term trendline, which connects 1985, 2000 and 2015 lows, held once again. 450+ pip rally stalled ahead of 50 DMA and 50.0% retracement of the last downswing. We'll see what the Fed will do but parity party seems ever more elusive.

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al_dcdemo 11 Dec.

UPDATE 6: Euro rallied in the first part of the week and gained above 1.10 for the first time in a good month. The pair stalled between 200 DMA (currently ~1.1030) and 100 DMA (currently ~1.1060) and has been backing and filling since. 1.0850 - 1.0900 shall hold if the post-ECB upswing is to continue. 50 DMA (currently ~1.0950) shall cap it in the meantime. If not, then the momentum of the move may be stronger that it appears at the moment.

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al_dcdemo 14 Dec.

UPDATE 7: Current equilibrium level in the Euro appears to be just below the big figure (~1.0980), basically around the mid point of the three-day consolidation which resembles a symmetrical triangle. The bottom of the pattern is found near 1.0950 and the top around 1.1025. In slightly broader terms, there is a support at 1.0925 - 1.0950 and a resistance at 1.1030 - 1.1060. There's possibility of fake breakouts ahead of the FOMC. Though I'd say the risk is to the upside, at least until 76.4% retracement of the last D1 downswing (~1.1250) is hit.

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al_dcdemo 28 Dec.

UPDATE 8: This week is probably the lightest one for the year with regard to economic data and certainly the most holiday-packed. Lower-tier European data, released mainly on Wednesday, most likely won't have any impact. U.S. will publish CB Consumer Confidence, Unemployment Claims and Chicago PMI, which may contribute to some volatility in these thin conditions.

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al_dcdemo 29 Dec.

UPDATE 9: Last two weeks of a year are known to be the quietest in most markets. Low participation means low liquidity and usually low volatility. However, it's easier to move markets in such conditions and if someone decides to execute a big order, the move could be big too. That move is more often than not faded or at least retraced to a great extent as liquidity returns.

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EURo to remain heavy

al_dcdemo Posted 31 Oct. as Analysis on EUR/USD, Target: 1.0975, Date: 1st of December, 12:00 GMT  in #Technical analysis #EUR/USD #Breakdown #Bounce #Downtrend #Bearish Bias #Channel Line #2005 Low #Upward Sloping Channel #Divergent Monetary Policies
Monthly chart
The pair has been in downtrend since May 2014. After it broke below the longer-term trendline that supports lows of years 2005, 2010 and 2012, a series of important levels gave way, including 2012, 2010 and 2005 lows. The levels were falling like dominoes before the rout finally stopped near the declining channel-line drawn off 2008 and 2010 lows and the trendline that connects 1985 and 2000 lows.
Weekly chart
The low was put in place at 1.0462 after stops below 1.05 were cleared. …
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al_dcdemo 20 Nov.

UPDATE 4: Broader U.S. dollar selling, that started yesterday after publication of the last FOMC meeting Minutes, continued today. Euro rallied a good cent before it ran out of steam above 1.0750. Long term trendline, which I wrote about in my article few weeks ago, is holding for now. However, most signs are pointing to lower prices and the trendline may well give way in the weeks ahead. That would open door to parity (1.00) and maybe even below that, with 0.85 level being often cited in financial media.

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al_dcdemo 22 Nov.

UPDATE 5: Euro lost nearly a cent in the past week against the dollar. Weekly range was worth little less than a cent and a half. The pair started the week on the back foot and convincingly broke below 1.07. It fell to as low as 1.0617, the lowest since mid April. It corrected some of its losses on Thursday, but then Draghi's speech on Friday sent it back to the lows.

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al_dcdemo 23 Nov.

UPDATE 6: Week ahead features a couple of European economic indicators, including PMIs and German Ifo Business Climate. U.S. will report several important data points too: Prelim GDP, CB Consumer Confidence and (Core Durable) Goods Orders. Technical bias in the pair is still bearish though probability of a near term correction is rising as we are approaching 1.05.

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al_dcdemo 27 Nov.

UPDATE 7: Euro lost about a half of a cent against the dollar this week. The range has been tighter than the previous week's one - it was roughly a cent and a quarter wide. The pair extended its decline past last week's low and also closed there. Since mid October, when Draghi revealed that the ECB will review its current policy, the pair has posted five losing weeks out of six.

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al_dcdemo 29 Nov.

UPDATE 8: Next week is the first big week of December, particularly for the Euro. ECB will likely cut the deposit rate and perhaps extend and/or expand its QE program. U.S. macroeconomic data released in the week ahead includes: ISM Manufacturing PMI, ISM Non-Manufacturing PMI and NFP report. The pair is holding just above the resistance band, defined by March (~1.0460) and April (~1.0520) lows. We'll not have to wait too long to see whether it holds or breaks.

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