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On Monday, trading on the euro closed down. After an unsuccessful attempt by buyers to take the price above 1.0630, the euro fell against the dollar to 1.0575. A touch of volatility was to be found during the day yesterday as news came in from France. Ex-Prime Minister Alain Juppe ruled out taking part in the French presidential elections.
The euro fell as US 10-year bond yields rose during trading in New York. US 10-year bond yields: 2.494% (up 0.72% from 06/03/17). In Asia, bond yields rose by 0.12% to 2.496%.
Market expectations:
In Asia, the euro is in a sideways trend, staying at around the 1.0581 level. From the intraday price model on the hourly timeframe, the euro is expected to fall further to 1.0563. The euro is unlikely to be able to make any gains against the dollar in the wake of the ECB’s meeting (on Thursday). If the target is reached during the European session, then we can expect a drop to 1.0550 when trading gets underway in the US.
Although the market now puts the probability of an interest rate hike by the Fed in March at 80%, the dollar will continue to receive support until their meeting on the 15th of this month. CME Group’s FedWatch data shows that the likelihood of a rate hike has gone up from 79.7% to 86.4%, from 81.9% to 87.5%, and from 90.2% to 92.7% for March, May, and June respectively.
Day’s news (GMT+3):
EURUSD rate on the hourly. Source: TradingView
Intraday forecast: low: 1.0563, high: 1.0599, close: 1.0569.
Disregarding the news from France, my predictions for Monday came off in full. Monday worked against Friday’s rally.
