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On Wednesday, trading on the euro closed down. Market volatility was high as Janet Yellen’s pre-prepared remarks were published. She remarked that the US economy was growing fast enough for another rate hike and plans to continue normalising the Fed’s balance sheet.

The dollar strengthened against its major rivals on this news. In theory, it should have begun to weaken against the euro by the end of the day, given that the US regulator doesn’t feel it necessary to sharply raise interest rates. US bond yields sharply fell in response to the comments. Depending on the data to come out over the course of the rest of the year, the American central bank may decide to raise interest rate one more time this year, and that’s all. I think it most likely that there’s some crowd psychology at play here. The market swung downwards and buyers started closing their long positions, which caused the euro to slide by 98 pips to 1.1392.

Day’s news (GMT+3):

EUR/USD rate on the hourly. Source: TradingView

A breakout of the trend line occurred at the low of 1.1312, but the subsequent rebound to 1.1392 made it a false one. The euro has been finishing rather weakly over the past few days. Buyers didn’t allow the formation of a bearish engulfing.

The euro rate has since recovered to 1.1444. The 45th degree runs through 1.1445. My forecast is based purely on technical factors, but let’s not forget that Janet Yellen will be speaking again today and that US bond yields are down. The price could easily return to 1.1490 and continue higher.