On Thursday the 12th of October, trading on the euro/dollar currency pair closed down. The rate fell from 1.1880 to 1.1827. At the beginning of the European session, the euro dropped further as the dollar rose across the board. It then received some support from the euro/pound cross following reports that Brexit talks had hit a deadlock. The price briefly recovered from 1.1827 to 1.1851 before falling back to 1.1827.
The euro/pound cross hit a new daily low, but the euro kept trading above 1.1824 against the dollar. Such behavior from speculators was down to a slide on the dollar across the board along with the pound’s recovery.
The pound recovered its losses after a report from the German publication Handelsblatt that the EU is prepared to offer the UK a two-year transitional deal. Such an offer, however, would depend on the UK fulfilling its financial obligations to the EU.
Day’s news (GMT+3):
Fig 1. EURUSD rate on the hourly. Source: TradingView
Yesterday’s predictions came off. Sellers first broke the trend line of the C-C channel before successfully breaking out of the D-D channel. The 45th degree at 1.1824 is acting as a support. The price has tested this level three times.
At the time of writing, the euro is trading at 1.1847, at around the 22nd degree. The dollar is trading down against all the majors. Nevertheless, my forecast today looks downwards, with a target of 1.1796 (67 degrees).