Forex Forecast and Technical Analysis
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.
Today after Draghi speech market strated strong and fast uptred, that is looks very strange, because Draghi didn't said anything new to the market. Same time today we have Yellen speech and looking that market now is trading on the key resistance level, very possible that Yellen will be able to turn market down. An downtrend will start as soon, as the market drops below support level 1.1320fx/1.1365cme, which will be followed by a move down to support level 1.1170fx/1.1240cme.
Uptrend scenario: Market is going to start downtrend from resistance level 1255 - 1258, with target on support level 1243 and this downtrend may be expected to continue, while market is trading below resistance level 1258. Downtrend scenario: An uptrend will start as soon as the market rises above resistance level 1258, which will be followed by a move up to resistance level 1263 - 1268.
Uptrend scenario: Market is going to start downtrend from resistance level 43.65, with target on support level 42.90 and this downtrend may be expected to continue, while market is trading below resistance level 43.65. Downtrend scenario: An uptrend will start as soon as the market rises above resistance level 46.65, which will be followed by a move up to resistance level 44.45 - 44.90.
Uptrend scenario: Market is going to start downtrend from resistance level 1.1233, with target on support level 1.1190 and this downtrend may be expected to continue, while market is trading below resistance level 1.1233. Downtrend scenario: An uptrend will start as soon as the market rises above resistance level 1.1233, which will be followed by a move up to resistance level 1.1256. Downtrend scenario: An downtrend will start as soon, as the market drops below support level 1.1170, which will be followed by a move down to support level 1.1105.
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