Weekly / Long-Term Forecast
Last week EU GDP increased from 2.2% to 2.3%, economy continue its recover and while we trading in uptrend above main support level 1.1977, marker is going to reach key resistance level 1.2237. However we have signs of loss of uptrend impulse, as pair dropped below 1.2060 - 1.2040 and in this case market is able to start downtrend with target to support levels 1.1923 and 1.1821 - 1.1760, if will break down main support level 1.1977. We need waiting for Thursday US "Core CPI" news to see further trend scenario.
During time of US economy recovery dollar was in downtrend (may – aug 17), where EURUSD became to very high price 1.2050. Fact of this was Draghi words about QE stop, but as we now see, here is still no reasons for this, because EU CPI do not have strong uptrend and can’t became closer to 2% target level. So Draghi missed, where same time US became much stronger (GDP increased from 0.7% to 3%). Worsens the situation with euro also that now eurusd course 1.2, that increased from 1.035, that is over 20%. EU goods became more expensive, where US more cheaper, so US now became in more profitable situation. Also technically levels 1.2 – 1.22 is very strong resistance, from that market can have confident correction to 1.14. Same time pound will be more weaken currency against dollar and can fell from current 1.29 to 1.25.
Positive (+) and negative (-) factors for DOLLAR: (+) FED still saying about % rates rising; (+) yearly GDP cycles suggest recovery of GDP in the middle of year closer to 3% (that on 1% above EU and GB); (+) local dollar falling from 1.05 to 1.15 (over 10%) increasing export and rising of Manufact. PMI, that will start recovery, and also increasing CPI rising because of more expensive foreign goods, that support % rates increasing; (-) falling of WTI prices decreasing CPI and perspectives for % rates. But now oil will be trading in range of $42 - $49, that will stabilize situation. Only falling below $42 will open road to $37, that will be negative for CPI and % rates.
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Currency pairs: EURUSD, GBPUSD, GOLD
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Weekly trading reports by students who completed my training course. Report includes initial trading plan and the result of this plan being implemented.
In these articles I tell about my experience and insight on the market accumulated over years of trading since 2003.