Analysis of the past week

The past week was very volatile in currency pairs with the US dollar and the euro. The main event of the week was the publication of the minutes of the ECB meeting. Based on the results of the meeting, single currency collapsed across the entire spectrum of the market. The reason for the decline in the euro was soft rhetoric and the ECB’s reluctance to curtail the quantitative easing program. An additional factor in the strengthening of the US currency is optimism about the promotion of tax reform in the USA and the expectation of the announcement of a candidate for the post of head of the US Federal Reserve.

As a result, the euro against the main basket of world currencies has receded from the monthly maximum and is trading near the August lows. Level 93.30 corresponds to the neck level of the head and shoulders figure on the daily timeframe. This level continues to be very significant and the market is unlikely to overcome it in the near future. Therefore, at the beginning of the next week, a correction is expected from level 93.30 that will also be limited to resistance levels: 93.60-70 and 94.00.

Anton Hanzenko