After the close of the European session, the EUR/USD lost all of its gains from the first half of the day. The American dollar strengthened throughout the market in response to an announcement by the US Fed's Dennis Lockhart.

Alpari: Technical Analysis

Eurobulls Losing Control of the Situation

 

Yesterday’s Trading:
On Tuesday, the euro/dollar traded by the LB all the way to market close. The euro dropped slightly after the release of the US’ managers’ purchases data which met expectations. After the close of the European session, the EUR/USD lost all of its gains from the first half of the day.

The American dollar strengthened throughout the market in response to an announcement by the US Fed’s Dennis Lockhart. He announced that the FOMC’s 16-17th September meeting will see him voting for an interest rate hike and he will only abstain from doing so if there is a significant worsening of the economic situation in the country.

The US manufacturing orders in June increased by 1.8% (forecasted: 1.8%, previous: reassessed from -1.0% to -1.1%).

The euro dollar, including in Asia, was down from 1.0987 to 1.0847. The pair is trading close to the D3 line. To get a clearer picture, we need to have a look at some of the older time periods: the weekly and the daily. More about this below.


Main news of the day:

  • At 11:30 EET, the UK is publishing its July service sector PMI;
  • At 12:00 EET, the Eurozone is releasing its June retail sales figure changes;
  • At 15:15 EET, the US’ ADP July labor force number changes will be in the public eye;
  • At 15:30 EET, Canada and the US are releasing their June external trade figures;
  • At 17:00 EET, the US will present its July service sector business activity index from the Institute of Supply Management.


Market Expectations:
Friday’s American labor market report is fast approaching. In connection with this, attention is firmly focused on the ADP’s publication of data on employment numbers for July and the service ISM. The UK PMI and Eurozone retail sales figures will keep have an effect on the market until the US stats are out. The market has been in a sideways trend for a while now, so the market participants are reacting to pretty much every little bit of news.


Technical Analysis:

  • Intraday target: maximum: 1.0898 (Europe opening), minimum: 1.0825 (in the States), close: 1.0855;
  • Intraday volatility for last 10 weeks: 130 points (4 figures).


Hourly
The euro/dollar has fallen from the 45th to the 157th degree. In part, the rate is rebounding from this degree and after which the fall will continue to the 180th degree. If the euro goes straight for the 180th degree, there’ll most likely be a powerful rebound before Friday’s NFP and tomorrow’s Bank of England meeting.

EURUSD 

Daily

The price has left Monday’s price range. The euro/dollar has returned to the 1.0807-1.0818 price zone. The dotted line goes through the close price, so it’s really important where the euro/dollar closes today. If it goes lower, it means that we’re going lower than 1.0807. If not, then we’re heading back to 1.0930. Now to the Weekly tab.
EURUSD 

Weekly
Dennis Lockhart’s announcement attracted the sellers to the market. Yesterday they broke Monday’s minimum. There is a risk that it could depart to 1.0730/40 before Friday’s NFP. This is where the support is. As soon as the sellers have passed it, the dollar will resume its rally.
EURUSD 

Vladislav Antonov, Alpari