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Forex Trading Signals: USDX and EURUSD February-March 2018

USDX and EURUSD February-March 2018

In short, the Euro seems ready to explode as high as 1.34 in the following months, but ECB is trying hard to prevent it. The Americans say never trade against the FED, let’s see if that is true for ECB as well.

Market: Foreign Exchange

Assets: EURUSD, USD-X

EURUSD Today: 1.2350

Basic Forecast: EURUSD will range between 1.19-1.26 for several weeks, and then it will move considerably higher, targeting 1.34

Trade Signals: (i) Long Positions if EURUSD retraces to 1.1900, or (ii) Long positions if EURUSD manages to cross above 1.12600-1.2650 in the weekly chart

EURUSD OUTLOOK -EU and the US back in a Currency War

There are concerns by the European Central Bank that a continued USD weakness could have strong negative consequences for Europe’s economic growth. On the other hand, the American Administration is unwilling to respond to the increasing inflationary concerns. Note that in the first quarter of 2018, the American GDP is expected to grow 4.5% (annualized).

In this context, a new currency war breaks between FED and ECB. These are the basic actions of each side:

FED ACTIONS (Goal is a weaker dollar to push growth further):

(i) Still implements an Expansionary Fiscal Policy, which is financed by Treasury debt

(ii) Not responding to inflationary concerns (there was a recent 2.9% rise in annualized average hourly earnings)

(iii) Not responding to the further widening of US Trade Deficit

(iv) Feels comfortable as GDP growth is expected at record levels in the 1st quarter of 2018

(v) Threats of further protectionism –Trump Administration imposed trade tariffs on solar panels in January 2018

ECB ACTIONS (Goal is stopping the Euro’s advance):

(i) Revealing concerns about the Euro’s volatility (January -Mario Draghi)

(ii) Tactical interventions (statements) by ECB members against a weak USD

(iii) Plans for a full banking union and a further fiscal integration between EU members

(iv) ECB is still printing money and the long-term inflation target remains at 2.0%

EURUSD Technical Analysis

EURUSD trades in a clear bullish trend that started in April 2017. Back then, EURUSD traded below 1.06, now it trades at 1.2350.

Chart: EURUSD

EURUSD -Daily

Resistance/Supply Levels:

  • 1.2390-1.2420 (medium: 1/5)
  • 1.2510-1.2540 (strong: 3/5)
  • 1.2590-1.2650 (very strong: 5/5)
  • 1.2890-1.2900 (medium: 2/5)
  • 1.3400-1.3450 (strong: 3/5)

Support/Demand Levels:

  • 1.2240-1.2200 (medium: 2/5)
  • 1.2070-1.2010 (medium: 1/5)
  • 1.1940-1.1900 (medium: 2/5)
  • 1.1830-1.1800 (strong: 3/5)
  • 1.1730-1.1680 (strong: 3/5)
  • 1.1550-1.1500 (very strong: 5/5)

Basic Forecast: Most probably, EURUSD will range between 1.19-1.26 for several weeks, and then it will move considerably higher, targeting 1.34.

As concerns the US Dollar Index, it is trading close to very strong support. The USD-X is found today at 89.60 points. The key support level is between 88.10-88.40.

Chart: USD-X (US Dollar Index)

US Dollar Index (USDX) -Daily

EURUSD Statistics

Here are the Statistics for EURUSD based on 17 years of research by Qexpert.com (G. Protonotarios).

MONTH

RETURN

TIMES (↑)

TIMES (↓)

VOLATILITY

FEBRUARY

-0.23%

9

9

0.83%

MARCH

+0.29%

9

9

0.85%

APRIL

+0.97%

11

7

0.79%

MAY

-0.60%

7

11

0.85%

JUNE

+0.65%

12

6

0.85%

More Statistics Here

 

Free Forex Trading Signals: USDX and EURUSD

George Protonotarios, Financial Analyst, » George at Linkedin

for TradingCenter.org (February, 14th 2018)

 

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