EUR/USD, Forecast and Analysis
Fact of % rates increasing is negative event and dollar will fall on over 550 pips during few month to 1.1000 and 1.1250
Today Fed will increase % rates, but this fact will not bring anything positive for dollar for long term perspective, only a few days we can have positive effect. Why? When Fed increased % rate on 16.12.15 eur/usd was rising during 3 days and made +200 pips, but after that felt on -660 pips during 2 month. When Fed increased % rates in second time on 14.12.16, dollar was rising during 2 days, made +250 pips, but then felt on -480 pips during next 1.5 month. Same was with prices on gold: 1 rising +240 (4 days) and then -2100 (2 month); second +330 (2 days) and then -1400 (3 month). This saying, that before rates increasing, market already included this possibility in price and by the fact price start to go in opposite side.
After % rates market will switch his attention on negative factors
We have negative factors for % rates future, as:
- unknown Trump tax policy, that Fed need to include in further rates and as long Trump do not saying about it, as more we have a risk that his promises will not be fulfilled;
- collapsed oil price, that will reduce rising of CPI and will extend terms of increasing for next % rates;
- problem with further federal debt prolongation, that can not to be approved by government for some time, that will create instability and we already had such situation with Obama;
- problem with % rates increasing above 2% at all, because of huge debt that US will not be able to service with big rates.
Same time on previous week Draghi increased ECB expectation relatively to much stronger CPI and increased GDP growth, that is positive for euro.
All this Trump promises without execution and top trading of US stock indexes, with big US dept and without rising of % rates above 2% and to 2%, is looks like a very big HYIP (financial pyramid), that Trump’s brigade trying to sell for us from the market top.
Market is trading on strong support 1.0550 - 1.0500, from that we can expect continuation of uptrend to resistance 1.0800 (neck line) and if it keeps on moving up above that level, we may expect the market to reach resistance level 1.1130 - 1.1230 .
An downtrend will start as soon, as the market drops below support level 1.0500, which will be followed by a move down to support level 1.0400, from that will be possible correction to resistance 1.0500. But if market will keeps on moving down below1.0400, we may expect the market to reach support level 1.0250.
Market is trading in sideways trading with possibilty of creation of double bottom pattern. An uptrend will start as soon as the market rises above resistance level 1210, which will be followed by a move up to resistance level 1234 - 1240.
The downtrend may be expected to continue in case the market drops below support level 1194, which will be followed by reaching support level 1175 and 1155.
US CRUDE OIL
Market rebounded up from strong support as lower boundary of monthy uptrend channel 47.00, but at price 49.00 we have strong resistance. An uptrend will start as soon as the market rises above resistance level 49.00, which will be followed by a move up to resistance level 51.90.
The downtrend may be expected to continue in case the market drops below support level 47.00, which will be followed by reaching support level 45.50, but its very strong level from that will be possible to made correction back on resistance 49.00. But if market will keeps on moving down below 45.50, we may expect the market to reach support level 42.00.
by Anton Kolhanov
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