Another day marked by extreme fluctuations occurred yesterday. The value of the euro rose by 74 points at the end of the day, after having fluctuated within a range of 176 points.
The price has broken over the last barrier at 0.9724, and the next objective at 0.9855 is now within striking level. The MACD indicator line on the daily scale is getting closer and closer to the level.
The initial version of the adjustment suggests that the growth may come to a halt in this particular region. According to the second potential growth, the price may continue to rise until it reaches 0.9955, which corresponds to the low level reached on July 14.
This outcome would result in a misleading exit of the price from above the MACD line. In the event that the price eventually comes back and finds support below the MACD line, the ensuing drop might go much lower than 0.9520.
The media cite a number of reasons for the rise of the euro, including the fact that the market has already completely priced in a rate hike by the Federal Reserve in November of 0.75 percentage points and even the "limit" of the rate of 4.85 percentage points in March of the following year.
We are willing to concede to such an interpretation and quote the euro at its present levels with a rate of 4.85%; however, political elements must be eliminated from the equation before it can be used.
This includes the most recent occurrence, which was sabotage at the Druzhba oil pipeline in Poland. Yesterday, the price of oil increased by 2.44%, while the S&P 500 index jumped by 2.60%.
That is to say, there is a return of market players to risk on a short-term basis. Yields on US government bonds, on the other hand, are not showing any signs of falling. A "shake-up" of the market in response to recent data on US inflation has been observed so far.
The core consumer price index (CPI) for September showed a rise from 6.3% year over year to 6.6% year over year yesterday, while the total CPI showed a decrease from 8.3% year over year to 8.2% year over year.
The price reached a point of equilibrium on the four-hour chart that was higher than the level of 0.9724 and the MACD line. The growth came to a halt at the equilibrium line, which demonstrates that the "bulls" are gathering their forces in preparation for a short-term turning point in their favor.
The Marlin Oscillator is now in the zone of growth. Due to the pattern of yesterday's reversal, we are keeping an eye out for the end of the correction either at the level that is the closest, which is 0.9855, or at 0.9950, which is more likely.
