MO EURUSD – 12.03.2018
38470
post-template-default,single,single-post,postid-38470,single-format-standard,bridge-core-2.5.6,ajax_fade,page_not_loaded,qode-page-loading-effect-enabled,,qode-title-hidden,qode_grid_1300,qode_popup_menu_text_scaledown,vss_responsive_adv,vss_width_600,transparent_content,qode-child-theme-ver-1.0.0,qode-theme-ver-24.1,qode-theme-bridge,disabled_footer_top,wpb-js-composer js-comp-ver-6.4.2,vc_responsive

MO EURUSD – 12.03.2018

Long Term Overview:

Economic Analysis

In recent weeks the market has seen Euro Zone bond yields reassert themselves as a major influencing factor in terms of EUR stability. With ongoing Italian budget negotiations likely to continue to destabilise the EUR in the near term. Investors are also unsure of the future stability of the EU Economy, due to the how the unfettered Brexit deal will affect the Euro in the Long Term.

The United States and Canadian government have forged a new trade agreement to replace Nafta, preserving President Trump’s ability to impose a 25 percent global tariffs on auto parts from Canada and Mexico – The USMCA trade deal is set to strengthen the dollar in the mid – long term, as a result of a combination of lower market uncertainty and stabilisation of the continents long standing trading relationships.

Strength in the Dollar is forecast to see a further growth after the Federal Reserve’s FOMC Chairman Powell stated that Interest Rates “are not quite at normalisation”. implied once again that FOMC Interest Rate policy is likely to remain relatively hawkish, after FOMC Powel turning Dovish in the most resent Interest Rate Decision; preventing excessive inflation in a firming economic environment. Interest rate normalisation is expected to be in the region of 2.50% to 3.50% which may reinforce overall positivity in the greenback.

In the near to medium term continued weakness and instability within the EU and Euro Zone Economy is likely to remain a key supressing factor for the EUR whilst in terms of the USD the federal reserves continued push towards interest rate normalisation, a resolution to the markets concerns regarding Nafta suggests the USD may see strength. This is likely to be especially true after the market seeing confirmation of a much-improved growth environment within preliminary Q3 GDP growth rate data that was released on the 26th of October, coming in much stronger than forecast. From an Economic stand-point, Price may see a continued drop south in the EURUSD in the medium-long term.

Long Term Analysis

Euro/Dollar bias is short on all three-monthly time frame charts. Price is near its upper bearish tripwire area on the 3Month chart, with price beginning its descent on all Monthly Charts. Price had found a floor at the 1.1300 S&R level, where price has broken below, before retreating above this area. If the EURUSD closes beneath this key area on a monthly time frame, price may see a further drop South to previous lows nearing the 1.0800 area in a couple of months.

Decision Point: Close below the 1.1300 S&R level

Long Term Trend: Short

Channel Range: Descending: 3300 pips

Possible Bias: Short

Medium Term Analysis

Bias for the EURUSD is short on the Monthly time frame chart. Looking to the 2 Week chart, this currency pair has closed outside of its upper bearish tripwire area, and is currently sitting below the prior 2week candlestick close. The Current formation of the weekly candlestick shows that price had a pullback into the EMAs, before retreating and forming a Spinning Top week candlestick; price closed on a Spinning Top Candlestick the previous 2week candle, suggesting further indecision around this area. A Dead Cross has also presented itself on the weekly, increasing the amount of resistance above price. With these factors in mind, the EURUSD may see a continued push from the Sellers to the 1.116 S&R level area, in the next couple of weeks.

Decision Point: Close beneath previous lows and S&R level nearing 1.1330

Long Term Trend: Short

Channel Range: Descending: 3300 pips

Possible Bias: Short