On Monday the 4th of November, trading on the euro closed down. The gains made by bulls on long positions on Friday above 1.130 were erased on Monday. Leading up to the US session, the EURUSD pair traded sideways. As soon as the pair dropped below the 1.1146 support, the decline gathered pace to reach 1.1125.
Considering that markets ignored the weak US industrial production figures, pressure on the single currency may have come from expectations regarding Christine Lagarde’s first speech as president of the ECB, where she avoided any mention of monetary policy.
Factory orders in the US in September dropped by 0.6% (forecast: -0.5%, previous: -0.1%).
European and US stock indices closed up. They were propped up by and large by optimism over a trade deal being reached by the US and China. Washington and Beijing say that progress is being made, while US authorities have hinted that a deal may be reached by the end of the month. All that’s left is for a concrete date to be fixed.
In today’s Asian session, the pair dropped to 1.1113, marking a 61.8% rebound from the rise from 1.1073 to 1.1176. At the time of writing, the euro is trading at 1.1126. The US dollar is trading up against the safe havens and down against the rest. Investor optimism of a US-China trade deal is propping up the bulls.
The pair rose above 1.1130 (lower line of the consolidation range between the 31st of October and 1st of November). The 45th degree is at 1.1165. The balance line runs through 1.1150, to which we expect the pair to recover. We could get a double top model (H 1.1180 from 21/10 and H 1.1176 from 4/11). If the pair rises above 1.1150, this will neutralise yesterday’s attempt at a reversal.