Last Friday, there was no relevant news and the euro was trading in a narrow range. In the review from September 19 we pointed out the statement that the major investors do not want to buy the euro despite the Fed’s decision not to reduce asset buying on their balance. Characteristic feature of this idea is current situation with gold, rising amid the news 5.5%, gold has almost reversed back to the starting point.
On the Federal elections in Germany Angela Merkel’s party has won. The preliminary results are the following ones Merkel’s Christian Democratic block took 41.5% (311 seats in Parliament), the Social Democrats won 25.7% (192 seats), and the German Green Party won 8.6% (63 seats). Merkel is re-elected.
Today information about PMI in France, Germany, and Eurozone in September is published. All the indicators both in Manufacturing and Service spheres are expected to be better than in August. In particular, PMI Manufacturing in the Eurozone is expected to be 51.8 vs. 51.4. At 17:00 UTC+4 the ECB president Mario Draghi speaks. At the same time US Manufacturing PMI in September is published; it is expected to be 54.2 vs. 53.1.
Due to the fact that no optimism after the Federal elections in Germany is observed, we examine the bearish trend as the major option; with the break of testing level 1.3498 we expect the price on the level of interjection of tree lines on the H4 1.3460. If the rate overcomes the support it will open the following levels 1.3412 and 1.3387. It is probably that during the European session the election outcomes will be taken into account; however we do not expect a considerable growth; if the rate breaks 1.3549 the high of September 19 1.3570 may be reached, then the attempt to reach 1.3615 is possible, interjection of three lines on the daily chart.