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On Monday, November 6th, the euro/dollar pair closed just 2 pips away from Friday’s closing price, leaving a long tail on the daily candlestick that reaches down to 1.1580. During the European session, the euro dropped to 1.1580. The main forces behind this were BoE governor Mark Carney’s speech and a drop for US bond yields and crosses involving the euro.

In the US session, the pair recovered from 1.1580 to 1.1616 (+36 pips) in the space of 3 hours. This rebound may have been caused by New York Fed chief William Dudley’s announcement that he will step down from his post in mid-2018. CME Group’s FedWatch tool puts the likelihood of an interest rate hike in December at 97%.

Day’s news (GMT+3):

Fig 1. EURUSD rate on the hourly. Source: TradingView

Buyers made several attempts to extend the upward correction to around 1.1635/40. Due to the drop on the euro crosses, all of these attempts failed, so my predictions for Monday didn’t come to fruition.

Buyers didn’t manage to push the price down all that far. They were held up by the 90th degree at 1.1582. This rebound has created a hammer formation on the daily timeframe. The price is now consolidating below the resistance zone of 1.1616 – 1.1620. After yesterday’s failure to induce a decline, sellers have turned a bearish picture into a bullish one. I won’t be surprised if we get a double base formation (with lows at 1.1575 and 1.1580) instead of a head and shoulders model. My forecast expects the euro to rise to the 45th degree at 1.1634. At the moment, it’s possible that the price could jump to 1.1640/50.