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EURUSD Forecast: Trump overshades macroeconomic data

EURUSD Forecast: Trump overshades macroeconomic data

Fundamentals:

EURUSD ended the week at 1.17200 under the shadow of the political jitters. Powell “lights the fire” by stating that “with a strong job market, inflation close to our objective, and the risks to the outlook roughly balanced, the FOMC believes that – for now – the best way forward is to keep gradually raising the federal funds rate.” who is testifying before the Congress. EURUSD dropped and ended up at  3-week low of 1.1574.

And Trump got up on the stage. In an interview, he criticised  FED.  He said that ” we go up and every time you go up they want to raise rates again. I don’t really — I am not happy about it. But at the same time, I’m letting them do what they feel is best.”  Dollar sell-off began. Immediately

Additionally, Trump revived trade war concerns by the end of the week, stating that “I’m ready to go to 500”

Considering that Trump has no control over the FED, it is likely the markets will re-focus on the macroeconomic data soon. 

Upcoming week, Thursday and Fridays will be the most interesting days. Thursday ECB will have their monetary policy meeting and Friday the US will release Q2 preliminary GDP and PCE inflation.

But for now, it is likely the “Trump Volatility ” will be over the markets.

Technically:

On the weekly chart, EURUSD made a bullish candle with a lower low and lower high. Far below MA 20. It’s a clear bearish trend.

On the daily chart, the pair ended the week below the EMA 50 but in the upper Bolinger Band over MA20.  RSI headed North.

The pair has been stuck between 1.17000  and 1.16000 without a clear break.

On the H4 Chart, technical indicators turned to Bullish. However, as said, upward momentum is limited on the bigger chart timeframes.  The shorter term Bearish trend will not change as long as the pair holds below 1.18500.

Levels to watch: 

Upside: Above 1.17200, minor resistance is at 1.17560 and major resistance is at 1.17900. If the pair breaks above 1.17900, it is likely to test 1.18500.

Downside: 1.16900 and 1.16500 will be the targets if EURUSD makes a few Hourly closing below 1.17200.

We will have a high volume of volatility, however, it seems that the markets are still pricing in more rate hikes in the US and a dovish stance from the ECB.  

 

 

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DISCLAIMER: This is a technical analysis study, not an advice or recommendation to invest money

 

EURUSD Forecast:  Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

 

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