FX.co ★ EUR/USD. Forecast for August 20, 2013

Yesterday, amid lack of news the euro has moved 2 points. Today relevant news is not published and the markets will take into account the political situation. First of all, it concerns riots in Egypt, which restrain the US dollar from falling amid rapidly growing yields of US bonds. 10-year bonds yield at 2.87% vs. 2.58% on August 8 and 1.66$ in the end of April. Profitability of 30-year yields is growing from the end of the last year (2.72%) and especially in August, having reached 3.89%. We suppose that in such circumstances the Fed will start cut QE3 from September and strengthen the US dollar.

The start of the campaign for the US dollar strengthening occurs on the peripheral markets. Yesterday the Indian rupee lost 2.38% (however, it was due to systemic crisis; the Russian ruble lost 10 kopeks, the Canadian dollar depreciated 50 points, the Australian dollar lost 70 points, meanwhile oil and metal prices are growing.

Thus, our forecast is still positive. When the first testing level 1.3310 is broken, the price has to test the area of highs of the last ten days of July, 1.3286-1.3296, coinciding with support of Kruzenshtern line (blue sliding) on the H4, after it the first target 1.3265, the low of August 7, opens. When it is broken the second target, the range of local highs on the H4 1.3230/38 opens.