Euro/Dollar Readying For Return To 1.0877

Yesterday’s Trading:

Yesterday the GBP fell throughout the market and forced the euro bulls to drop to 1.0819. The UK industrial manufacturing index fell to a three year low. Other key currencies followed the pound downwards. After trading closed in Europe, the euro/dollar returned to the LB at 1.0877.

When Chinese balance of trade data came out in the morning and the stock indices switched into the green, the euro/dollar renewed its minimum at 1.0810.

Main news of the day (EET):

12:00, Eurozone industrial manufacturing data for November;

17:00, US level of labour market vacancies and work force turnover for November;

17:30, US Ministry for Energy’s oil reserve report;

21:00, Fed Beige Book.

Market Expectations:

All I see for the end of today is a flat. In the first half of the day I expect to see the rate return to 1.0877 and then a sideways until Thursday. There is no important news planned for the euro. The oil reserve report could be a driver for the Canadian and this could put pressure on other currencies.

Technical Analysis:

Intraday target maximum: 1.0877 (current Asian), minimum: 1.0810 (current Asian), close: 1.0845;

Intraday volatility for last 10 weeks: 100 points (4 figures).

The euro stood at 1.0828 at 6:46 EET. Bull divergence has formed on the AO indicator. The stochastic has flipped downside up. The 1.0800 level is a decent support and the euro/pound cross could lend a hand too. Since the calendar is empty, my review is just for the European session.