Latest development reinforced possibility of my previous view about 1.2068/47 and even more for the next level down @ 1.1996
EUR is now siting at important fib @ 1.2102 (price) and just between two important time fibs (100% time extension of 12 Aug high on 18 sept and fib time sequence on 20 sept.) indicating possibility of minor low, but just with a break above 1.2240 and then 1.2270/2300 could indicate such low and with that a possible reversal.
Looking at the charts and the price pattern, I still hold my view of this move down ending at least @ 1.2068/47 and now I'm ready to consider even little lower to 1.1996.
Tomorrow news includes two important data releases Housing starts and FOMC announcement, with housing starts being the important one, since I believe that FOMC expected .25 points hike is already tailored in the price.
Bad housing data could prove critical for a strong reversal and that could be boosted more with even slight change in FED rhetoric suggesting possible end or pause of rate hike.
On the other hand we have the German election results. Market tends to see this as not very good for the EUR but this was already tailored in the market price with this latest move down, so I would not expect any significant pressure on the EUR from that side, even that there is a possibility which derives from the possible days (or weeks) of political horse-trading before any clear outcome.
By the end of this week
EIA Petroleum Status Report
Jobless Claims and Leading Indicators data are to be released, all dollar negative in my opinion. Next week data release also does not bring anything promising for the dollar (my humble opinion). Oil on the other hand could give some ease on the dollar short term too if it proves to be in a larger correction before a continuation up.
But as I have stated much earlier in my Journal mid September will see some dollar positive sentiment shift (short term) and with the latest development, even breaks below 1.19 are possible, but not very likely.
I believe shortly after this strong reversal will occur since the cracks will start showing visible bear eyes.
However one must not include his own expectation and must have a clear view at all times.
So,
the levels to watch:
above
1.2150/80
1.2210
as possible corrections and as a first indication of possible reversal
and
1.2230 to 1.2270 as a possible reversal sign
1.2530 will confirm reversal to 1.26/27/31 levels
on the downside
there is a longer term (weekly chart) support now around 1.2059
1.1997 important fib
1.1864 July low (2005 low)
1.175 April 2004 low
ID
while writing this EURUSD reached 1.2147 closing to 1.2151 level