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Sahmino callsCurrency

EuroEURNeutral

Tehran's euro rose 3.43 percent on a day the euro fell 0.12 percent against the dollar

Horizon: short-term (1 to 2 weeks, until 12 Mehr 1405)

Price when published

2,770,900 rials

That dayup3.4%

Support

2,736,600 rials

Invalidation

2,679,100 rials

The levels on the chart

Since writtenup6.6%

Conclusion

I'm calling the previous window lost and staying neutral: I put about a 55 percent chance that the euro will not close below 2,679,100 rial by 12 Mehr, since the rial-side political risk remains open. Risk: here the euro is only a shadow of the free dollar; any reversal in the dollar reaches the euro directly, and expectations of a Federal Reserve rate hike are also keeping the global leg down.

The evidence

  • Euro, 6 Mehr 1405, 13:40: 2,770,900 rial, 3.43 percent above the 2,679,100 rial of 5 Mehr; it broke the 2,747,600 rial ceiling of the 5 Mehr card range, and the range forecast turned out wrong.
  • Breakdown: the euro against the global dollar is 0.12 percent lower (1.1376, at 13:27) and the free dollar is 3.53 percent higher (2,433,000 rial, 13:34); meaning all the move came from the rial.
  • The cross rate (free dollar times euro-to-dollar) is about 2,767,800 rial, and Tehran's euro is trading only about 0.1 percent above it.
  • The rial leg was built by the very same dollar news: according to FXStreet (6 Mehr), Trump rejected Iran's proposal regarding the Strait of Hormuz; the global leg is under pressure from expectations of a Federal Reserve rate hike in October.

If it holds

If the euro stays above 2,736,600 rial (today's low), the base scenario is consolidation of a new step together with the free dollar.

If it breaks

If the euro closes below 2,679,100 rial (the 5 Mehr close), this view is invalidated and today's rial jump has been fully given back.

What to watch

What to watch: the free dollar, the euro-to-dollar rate relative to 1.1376, and news of a possible talk this week.

Every call on this symbol

24 calls; the move to the next call from the prices when written

  1. 28 September 13:41NeutralTehran's euro rose 3.43 percent on a day the euro fell 0.12 percent against the dollar2,770,900 rialsup6.6%
  2. 27 September 13:33NeutralEuro held the 2,588,000 to 2,747,600 rial range; the lower view ceiling rose to 2,622,900 rial2,678,800 rialsup3.4%
  3. 19 September 13:57NeutralGlobal euro's total move today was 0.03 percent, but Tehran's euro rose 0.62 percent, and the difference was made by the rial2,639,100 rialsup1.5%
  4. 16 September 11:12NeutralOf the 1.01 percent drop in the euro in Tehran, two-thirds came from rial strengthening and one-third from the global euro decline2,651,300 rialsdown0.5%
  5. 14 September 13:58BullishTwo days, two opposite directions, one reason: yesterday down 2.14 percent and today up 1.95 percent, both from the rial, not from Europe2,716,400 rialsdown2.4%
  6. 14 September 09:07NeutralThis time Europe worked against the move: the cross rate rose 0.13 percent and the Tehran euro fell 2.14 percent2,664,400 rialsup2.0%
  7. 13 September 13:30Neutral97 percent of the euro's drop from the peak was from the rial's side, not Europe; we stay neutral and do not move the invalidation line of 2,642,9002,687,200 rialsdown0.8%
  8. 13 September 08:39NeutralEuro support broke and the invalidation line is only 6,200 rial lower, so we bring the view down from bullish to neutral2,722,600 rialsdown1.3%
  9. 12 September 13:44BullishOf the 1.4 percent rise in euro in Tehran, all of it came from rial weakness; the global euro's share was negative 0.3 percent2,753,900 rialsdown1.1%
  10. 9 September 14:16BullishThe resistance we set at 11 o'clock broke by 14 o'clock, and this is the second time today it has gotten ahead of us2,714,700 rialsup1.4%
  11. 9 September 11:09NeutralOur target set for two to three weeks was hit in one session; and of today's 0.61 percent, only 0.13 came from Europe2,658,900 rialsup2.1%
  12. 9 September 08:44BullishSince 31 Mordad the rial has fallen about 15 percent against the dollar and euro, while the euro-to-dollar cross rate has stayed almost unchanged2,642,900 rialsup0.6%