Good morning traders. The main event today is the BOE rate decision where markets expect rate cuts and additional QE from Mark Carney in an attempt to balance the Brexit vote and future potential problems for the UK economy. Furthermore, we have the jobless claims in the US later today.
The EURUSD is falling nicely form our ideal target zone at 1.1250 and the market is forming a nice impulsive wave to the downside. What is important is that the nature of the fall looks impulsive so our outlook for now is on the right track. We now expect lower levels to follow and would like to see the lower corrective channel line at 1.970-80 be broken to confirm a further decline.
DAX is pushing to the upside after reaching our target for the wave lows yesterday. We regard this move as corrective, expecting further weakness into wave c of 4, but only after we see the blue wave b develop. Blue wave b may now ideally reach the 50.0 Fibonacci ratio, from where a new drop into wave c may occur.
German DAX, 1H
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