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On Wednesday the 10th of January, trading on the euro closed slightly up after Bloomberg landed a blow on the dollar during the European session. The news agency reported that China is planning to reduce or stop its purchases of US government bonds. The dollar dropped as bond yields rose due to the fact that China is the biggest holder of US debt. According to the US Treasury, China currently holds 1.189 trillion dollars’ worth of US government bonds. The news about China sent the euro up to 1.2018 against the greenback. Since there were no official announcements from any Chinese officials, however, there was no further impetus for the dollar’s decline. In the US session, the euro dropped to 1.1941. Due to the unexpected news on China, yesterday’s predictions didn’t come off. Sellers erased yesterday’s gains, bringing the exchange rate down to 1.1941. At the time of writing, the euro is trading at 1.1952. Considering that on Wednesday, the euro/dollar rate corrected by nearly 90 degrees, and that the rate returned to the LB balance line (sma 55), for today, I’m predicting that the euro will slide against the dollar to the 112th degree at 1.1881. To trigger this decline, the bears need to break through the 1.1930 support. At the moment, the following crosses are getting in the way of this: EURJPY, EURGBP, EURCHF, and EURCAD. If the euro continues to trade above 1.1915 up to the 15th of January, then from Monday, I’ll be expecting the euro/dollar pair to rise again. Source: forex broker

On Monday the 11th of December, trading on the euro/dollar pair closed slightly down, leaving a wick with a high of 1.1812 before dropping to 1.1769. With a bare economic calendar, market activity at the beginning of this week has got off to a slow start. Traders based their decisions mostly on the dynamics of US bond yields. In Europe, US 10Y bond yields dropped to 2.354%, before recovering to 2.391% in the US session. Growth for bond yields means growth for the dollar. Yesterday’s predictions didn’t come off. With the euro crosses rising and US 10Y bond yields dropping, the euro broke up the A-A channel. The euro’s rise against the dollar was stopped in its tracks by the 67th degree. The EURUSD rate dropped to 1.1765. The 45th degree has shifted from 1.1730 to 1.1758 as a result of the 1.1812 high being formed. I think the euro is going to move upwards from the 45th degree towards 1.1811. On the daily timeframe, two candlesticks with diverging tails have formed a range of 1.1730 to 1.1812. The euro will continue to move in whichever direction it breaks out of this range. Markets await the FOMC meeting and Janet Yellen’s press conference on the 13th of December. They’ve already factored in a 25-base-point increase to interest rates, so euro bulls shouldn’t waste their energy trying to push the price up here. I’m thinking about opening a long position with a BuyStop at 1.1780. If the euro renews the 1.1764 low, then it may be worth risking a long position from 1.1758/60. These are preliminary values, they may need adjustment later. Source: https://alpari.com/en/beginner/