{"id":100944,"date":"2017-01-18T07:01:19","date_gmt":"2017-01-18T12:01:19","guid":{"rendered":"http:\/\/countingpips.com\/?p=100944"},"modified":"2017-01-18T07:01:19","modified_gmt":"2017-01-18T12:01:19","slug":"eurusd-expected-fall-to-the-balance-line","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/01\/eurusd-expected-fall-to-the-balance-line\/","title":{"rendered":"EUR\/USD: expected fall to the balance line"},"content":{"rendered":"
January 18, 2017<\/div>
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By\u00a0Gabriel Ojimadu,\u00a0Alpari<\/strong><\/p>\n

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Previous:<\/em><\/strong><\/p>\n

On Tuesday the euro\/dollar closed up. The euro rose against the dollar by 1% to 1.0710 (session maximum fixed at 1.0720) and lost out by 2% against the pound, falling to 0.8626. The GBP rose against the dollar by almost 4 figures after the UK PM spoke.<\/p>\n

Market expectations:<\/em><\/strong><\/p>\n

On Tuesday the euro\u2019s strengthening stopped when the euro\/dollar flipped upside down. The pair is currently in a correctional phase. The price has been consolidating for 14 hours in a 1.0690-1.0720 range.<\/p>\n

If we take a look at the daily graph ten the euro bulls look to be aiming for the 1.0873 maximum from 8th<\/sup>December, 2016. Since the market is being dominated by euro sales at the moment, it\u2019s likely that the market will balance itself by knocking off the sellers\u2019 stops who believe in parity.<\/p>\n

On 17th<\/sup> January the USD reacted to Trump\u2019s interview with the Wall Street Journal by falling in Asia. In the interview he said that a strong dollar is harmful for US competitiveness.<\/p>

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By looking at the cycles and past patterns, I can\u2019t see any way the euro will strengthen against the dollar today. To head up, the price would need to return to the balance line at 1.0645 (at the time of writing this analysis). Since the Fed\u2019s Yellen is speaking late this evening, in my forecast I\u2019ve gone for a drop to the LB at around 1.0667.<\/p>\n

Day\u2019s news (GMT+3):<\/em><\/strong><\/p>\n