Analysis and Opinion »

24 February Forex daily review

Sergiy Zlyvko
Share on StockTwits
Published on

On Monday the waiting for the single currency, the British pound and the Swiss franc were fully justified. From the crowd Australian dollar has separated, which is due to cross-currency strengthened against the dollar to 0.9050 (an increase for the day was 50 points).

During the European session after the publication of unexpectedly strong statistics on the business climate index in Germany, EURUSD rose to 1.3770. At this level, the bulls run out of power and the pair has slipped to 1.3705. After the release of the service index of ISM, the euro rebounded in the U.S. session to reach 1.3745. A similar pattern was observed for GBPUSD currency pair, while the volatility of the pound was higher.

Sharp fall of the euro needs to pass the level of 1.3680. If you look at the schedule and spend 4H trend line from 1.3485 low, you will see that there was a rebound from the trend line. A similar pattern is observed in EURGBP. Therefore, now the lower bound is risen from 1.3680 to 1.3715. Resistance passes through the 1.3770 mark. If in Europe the bulls will go to 1.3770, ascending triangle may be formed. If the breakdown is held on 1.3715, the euro will go below. Our main scenario for the euro is the decline under fluorescent indicators that point to sell the euro.

At 7.00 GMT the block of statistics from Europe will be published. At this time, we will know final figures for Q4 GDP and foreign trade data in Germany. If there is a revision of the GDP to the downside – we are waiting the euro’s fall by 50 basis points from the current price at the time of the report. If the data coincides with the values of 0.4% q/q and 1.3% y/y, the reaction cannot be. In this case, the attention of traders is focused on the index of consumer confidence in the U.S. in February (15.00 GMT), which, according to market expectations, in February fell from 80.7 points to 80.2 points. The remainder is in the review.

The single currency went as predicted with a small deviation. Now the pair is back to yesterday’s level, but somehow indicators are not successful. We inclined to think that the EURUSD from yesterday’s IFO again will rise to 1.3760. Our main scenario is the decline. Here we arranged on a daily indicators that look down. To knock on the 4h trend line, it is necessary to pass 1.3715 mark. News will be published about Germany’s GDP, they can make the trigger for the strong fluctuations.

For British pound the volatility is turned our above expectations. On low ISM, the pair bounced off the support and now the pound is trading at 1.6665 or above. As the main scenario, we’re considering going back to 1.6600, but to be honest, the model is bullish and should be ready to attacked by the bulls and grow to 1.6715. The situation will depend on the cross.

Share on StockTwits