Probably the main event not only of the week, but of the whole of January will be today's meeting of the Board of the European Central Bank, following which, as expected, plans to tighten monetary policy will be announced. Up to an increase in the refinancing rate. And not ever, but before the end of this year. Similar reflections are suggested by the actions of both the Bank of England and the Federal Reserve. And if these expectations are met, then a fairly long growth will begin for the single European currency. This process may well last for a whole month, right up to the next meeting of the Federal Open Market Committee. If the ECB once again does not say anything, but only repeats the words about the need to maintain the stability of the economic recovery and the like, then there will be no need to talk about any growth of the euro. Simply resume the trend to strengthen the dollar.
Refinancing rate (Europe):
During the corrective movement, the euro exchange rate strengthened by 200 points against the dollar. This led to a reverse movement of the price to the resistance area of 1.1270/1.1320, where a local reduction in the volume of long positions occurred.
The RSI technical instrument approached the level of 70 in a four-hour period, which signals the euro's overbought status.
The Alligator indicator changed the direction of the moving lines from a downward to an upward cycle in a four-hour period. Alligator D1 is still leaning towards the downward development of the market, there is no MA line crossing.
There is a downward trend on the chart of the daily period, in the structure of which there is a correction cycle.
Expectations and prospects:
In this situation, traders are considering a temporary price fluctuation within the resistance area of 1.1270/1.1320, but everything can change in case of new speculative jumps. For this reason, the values of 1.1240 and 1.1335 will become signals, where a breakthrough of one of the levels will indicate the subsequent path of speculators.
Complex indicator analysis gives a buy signal based on the short-term and intraday periods due to price correction. Indicators in the medium term signal a sale due to a downward trend.