{"id":117703,"date":"2017-12-06T07:59:46","date_gmt":"2017-12-06T12:59:46","guid":{"rendered":"http:\/\/countingpips.com\/?p=117703"},"modified":"2018-06-01T15:48:28","modified_gmt":"2018-06-01T15:48:28","slug":"eurusd-sitting-below-the-trend-line","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/12\/eurusd-sitting-below-the-trend-line\/","title":{"rendered":"EURUSD: sitting below the trend line"},"content":{"rendered":"<div id=\"inves-1041673065\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">December 6, 2017<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By Gabriel Ojimadu, Alpari<\/strong><\/p>\n<div class=\"reviews-item__content\">\n<p><strong>Previous:<\/strong><\/p>\n<p>On Tuesday the 5<sup>th<\/sup>\u00a0of December, trading on the euro\/dollar pair closed down. I still can\u2019t understand why the euro dropped from 1.1874 to 1.1801 against the dollar. At the time, US bond yields were trading down. This drop gathered pace during the US session. The US\u2019s services PMI for November fell further than expected.<\/p>\n<p>There are another two factors at play here that could have led investors to short the euro and buy dollars. The first is the US Congress\u2019 approval of the tax reform bill. Secondly, the Senate\u2019s banking committee has voted for Powell to chair the Federal Reserve.<\/p>\n<p>Some believe that the market is undergoing a reversal in anticipation of Friday\u2019s payrolls report. On Tuesday, trading on the euro\/dollar closed at 1.1824.<\/p>\n<p><strong>Day\u2019s news (GMT+3):<\/strong><\/p>\n<ul class=\"list list_type_disc\">\n<li>10:00 Germany: factory orders (Oct).<\/li>\n<li>16:15 USA: ADP employment change (Nov).<\/li>\n<li>16:30 Canada: labour productivity (Q3).<\/li>\n<li>16:30 USA: nonfarm productivity (Q3), unit labour costs (Q3).<\/li>\n<li>18:00 Canada: interest rate decision, BoC rate statement.<\/li>\n<li>18:30 USA: EIA crude oil stocks change (1 Dec).<\/li>\n<\/ul>\n<p><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/alpari.com\/data\/media\/trunk\/images\/Analytics\/2017\/12\/eur_061217.png\" alt=\"\" \/><\/p>\n<p align=\"center\">Fig 1. EURUSD hourly chart. Source: TradingView<\/p><div id=\"inves-892255242\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<p>My expectations of a rise for the euro on Tuesday did not come to pass. The euro bounced from the trend line and was then beaten back from the balance line by sellers. In the space of an hour the euro had returned to the balance line, and an hour later, broke through it.<\/p>\n<p>Buyers tried to seize back control after the publication of a weak PPI report from ISM, but their efforts came to nothing. The drop intensified with the euro reaching 1.1801 as a breakout of the trend line is always a strong technical signal.<\/p>\n<p>The rebound occurred at the 112<sup>th<\/sup>\u00a0degree. At the time of writing, the euro is trading at 1.1841. There\u2019s no forecast on the chart because I couldn\u2019t determine which way the price will go today.<\/p>\n<p>Now I\u2019ll try to explain why it was so difficult to decide:<\/p>\n<ol class=\"list list_type_decimal\">\n<li>The pattern of the last 120 bars (hourly timeframe) indicates the euro will rise to 1.1882.<\/li>\n<li>Hourly cycles point towards a decline to around yesterday\u2019s low of 1.1801.<\/li>\n<li>The range 1.1844 \u2013 1.1856 is a strong resistance. A lot of lines and levels intersect here.<\/li>\n<li>US 10Y bond yields are declining.<\/li>\n<li>Euro crosses are rising, expect against the yen.<\/li>\n<li>In today\u2019s Asian session, the dynamics on the US dollar are mixed and it\u2019s unclear how it will behave itself once trading opens in London.<\/li>\n<\/ol>\n<p>Today\u2019s key events for the foreign exchange market are the ADP employment report and the Bank of Canada\u2019s interest rate decision.<\/p>\n<p>Markets are expecting the NFP report to show a net increase in employment in November of around 200,000. The ADP report is expected to show an increase of 185,000 new jobs. If these figures fall in line with expectations, the reaction will be minimal. The ADP report has a short-term effect on currency markets when the figure is off by around 50,000.<\/p>\n<div class=\"s_invisible_yes\">Source: &#8220;<a href=\"https:\/\/alpari.com\/en\/hidden_copyright\/\" rel=\"nofollow\">EURUSD: sitting below the trend line<\/a>&#8220;<\/div>\n<\/div>\n<div><\/div>\n<div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Gabriel Ojimadu, Alpari Previous: On Tuesday the 5th\u00a0of December, trading on the euro\/dollar pair closed down. I still can\u2019t understand why the euro dropped from 1.1874 to 1.1801 against the dollar. At the time, US bond yields were trading down. This drop gathered pace during the US session. The US\u2019s services PMI for November [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-117703","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/117703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=117703"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/117703\/revisions"}],"predecessor-version":[{"id":117705,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/117703\/revisions\/117705"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=117703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=117703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=117703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}