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USD Acts as Safe Haven Asset

However, in this case, demand is a bit overshadowed by rather mixed numbers from the USA published last Friday. For example, according to preliminary estimations, the Markit Manufacturing PMI dropped to 51.7 points in January after being 52.4 points the month before. On the other hand, the Markit Services PMI went from being 52.8 points in December to 53.2 points this month.

This week, the US Federal Reserve is scheduled to have its first meeting this year and expected to decide on its monetary policy. The key interest rate will apparently remain intact, but that’s not 100%. Investors will switch their attention to the regulator’s comments that will follow after the meeting is over.

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In the H4 chart, EUR/USD has reached its predicted downside target at 1.1055. Looking at the fifth descending wave, we may assume that the price may continue falling with the target at 1.1012. After forming another consolidation range around 1.1035, the pair has broken it downwards and many continue falling towards the above-mentioned target.

Possibly, today the instrument may reach it and then form a reversal structure for a new correction towards 1.1094. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving below 0 inside the histogram area. The line is expected to leave the area and grow to break 0. After that, the instrument may boost its growth on the price chart.

As we can see in the H1 chart, after breaking 1.1035, EUR/USD has reached 1.1019. Today, the pair may correct to test 1.1035 from below. Later, the market may start another decline towards 1.1012 and then form one more ascending structure with the first target at 1.1050. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving below 50 and may continue falling to reach 20. Later, the indicator may grow to return to 50. After this level is broken, the price may boost its growth on the price chart.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex


Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

This article was originally posted on FX Empire

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