Forex Forecast and Technical Analysis
On 1.05 EUR/USD will take off losses of buyers and go back to 1.08/09 Last month oil prices felt from 53 to 49 and lost over 10%, that’s why march “US core cpi” of this Friday will not increase or lost 0.1 point (5% of gasoline spending), that will slows down expectations against FED % increasing. Same time Trump still do not have any solutions how to decrease budget deficit and this weekends meeting with Chinese president Xi Jingping was unsuccessful. Trump still not said anything about tax policy and his battle with congress increasing fears that we will not hear anything for a long time, that’s also decreasing optimism about dollar. Euro zone still have neutral economic situation, so from 1.05 eur/usd will find very strong support, when same time dollar index is almost got main resistance on 101.5, from that will fall on 99.70. Main attention of few next weeks will be chained to elections in French, that’s starts on April 23 and can have prolongation, if will need second tour. Chance of Le Pen win is too low, so she will not have it and after her losing euro will got benefit in rising against dollar over 1-2% and this fact will be last decisive reason when eur/usd will start uptrend to 1.08 – 1.10.
Eurusd will go back to 1.0550, gold to $1200 and oil rebound down from $49 and will retest 47.60 On last Friday Trump hadn’t able to close “Obama care” program and he was “destroyed” by congress. Looking on this, most part of traders decided that after this fall Trump will have the same situation with all his rest laws, as spending on infrastructure and tax policy. Fake downtrend on dollar was supported with gap on eurusd, when big players on “Trump risks” started to decrease some part of their dollar longs. After that we have break up of daily neck line and by cascade this started to opens deals of rest small players
On previous week increasing of US % rates didn’t bring anything new to the market, because he is already expected that and included this rising to the price. On this week we do not have any important news, so market will be trading sideways.
On previous week increasing of US % rates didn’t bring anything new to the market, because he is already expected that and included this rising to the price. On this week we do not have any important news, so market will be trading sideways. Eur/usd is trading on main resistance level as 1.0780 (previous 2 high and neck line), from that will fall with correction to support 1.0560 (low + trend line). Same with gold, market will be on correction. And oil market will be trading sideways before wednesday “Crude oil inventories”, but with risk of downtrend continuation to the main support 48.00.
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.
Uptrend scenario: Uptrend scenario is complicated for today with accumulation of resistances between levels 53.30 - 53.70. Downtrend scenario: The downtrend may be expected to continue, while market is trading below resistance level 53.30, which will be followed by reaching support level 52.15.
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