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Forex Signals on EURUSD, GBPUSD and Brexit Implications -Mach-April 2016

Free Forex Trading Signals: GBPUSD and EURUSD March-April 2016

Market: Forex

Asset: GBPUSD and EURUSD

TCI Forecast: GBPUSD Reversal on March and Uptrend ()

Nothing is discussed more these days than the Brexit. Britain's prime minister, set June 23rd, 2016 as the date for a referendum regarding the membership of Britain in the European Union. The Forex market dances on the ‘vibes’ of the Brexit and its implications.

» The Previous Trading Analysis by TradingCenter

Eurozone in Trouble and EURUSD

Against the general market consensus, I believe that a potential. Brexit will harm the EU much more than Britain itself. It will harm the EU in economic terms, but majorly in political and geopolitical terms. It will also create a climate of uncertainty regarding who is the next to leave the table. The Eurozone inevitably will be affected by the implications of a Brexit during the following months. In addition, the problem of the uncontrolled immigration in the EU gets worst, but it can still be resolved. In this uncertain environment, EURUSD trades lower.

Major Investment Banks Forecast EURUSD in 2016

In the following table, major investment banks forecast the rate of EURUSD in 2016. The average forecast for Q1 is 1.073, and for Q4 is 1.053.

Table: EURUSD rate in 2016

EURUSD

Q1 2016

Q2 2016

Q3 2016

Q4 2016

HSBC

1.15

1.16

1.18

1.20

Citigroup

1.09

1.06

1.03

1.03

Credit Suisse

1.04

1.03

1.01

1.00

Barclays

1.07

1.03

0.98

0.95

JP Morgan

1.05

1.03

1.08

1.13

Morgan Stanley

1.04

1.03

1.02

1.01

Average

1.073

1.057

1.050

1.053

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Britain’s Outlook and Brexit Implications

The polls of Brexit are getting closer but recent surveys find the majority of people wanting to leave. The bookmaker’s odds, on the other hand, show a clear ‘stay’. The odds for ‘stay’ pay at the moment 2/5, and that means only 1.40. In the case of a Brexit, the final implications on the British economy should be considered as uncertain. Here are some key facts regarding the Britain’s upcoming referendum.

Facts and Implications of a Brexit

(1) Britain joined EEC back in 1973 (European Economic Community)

(2) In the referendum of 1975 for the country's continuation of the European Economic Community membership, the ‘Yes’ received 17.4 million votes or 67.23%.

(3) About 45% of all UK exports go to EU countries

(4) About 52% of all UK imports are coming from EU countries

(5) In the case of a Brexit, Britain will save some of the money that it sends currently to the EU, but in order to access the ‘Single Market’ it will still have to pay in favor of the ‘weaker’ European countries.

(6) The implications on growth and employment, at least for the next few years, will be negative. On the other hand, the government will be able to control more efficiently the labor market


TCI ANALYSIS ON EURUSD AND GBPUSD

The TradingCenter Indicator (TCI) is a unique Technical Analysis Indicator developed by TradingCenter. More About TCI

TCI on EURUSD

In the 20th of February 2016, TCI on EURUSD indicated +6.27%, which may be considered a general overbought level for Forex assets. The next day EURUSD reached a local (intraday) high at 1.1376 and made a local close-high at 1.1320. Although EURUSD achieved new local highs, TCI signaled a trend reversal (TCI indicated +6.07%), the next day the reversal happened and the EURUSD downtrend begun.

As March 2016 starts, TCI on EURUSD indicates at least 2-3 days of the downtrend continuation, and then a potential uptrend reversal. But this reversal is not confirmed yet and therefore traders must be very careful. Here are the TCI Indications and forecasts regarding the next 20 days of EURUSD trading (Press the following slider to reveal TCI indications).

Table: TCI on EURUSD

Date

Close

High

Low

Change (%)

Volatility (%)

TCI

2016.02.05

1.11566

1.12467

1.11082

-0.47%

1.2%

4.74%

2016.02.08

1.11926

1.12152

1.10860

0.32%

1.2%

4.90%

2016.02.09

1.12924

1.13376

1.11617

0.89%

1.6%

6.20%

2016.02.10

1.12927

1.13109

1.11599

0.00%

1.4%

6.27%

2016.02.11

1.13200

1.13760

1.12733

0.24%

0.9%

6.07%

2016.02.12

1.12554

1.13332

1.12135

-0.57%

1.1%

5.03%

2016.02.15

1.11538

1.12492

1.11273

-0.90%

1.1%

3.10%

2016.02.16

1.11433

1.11922

1.11236

-0.09%

0.6%

2.68%

2016.02.17

1.11267

1.11784

1.11053

-0.15%

0.7%

2.55%

2016.02.18

1.11053

1.11496

1.10708

-0.19%

0.7%

2.29%

2016.02.19

1.11290

1.11386

1.10660

0.21%

0.7%

3.19%

2016.02.22

1.10288

1.11241

1.10025

-0.90%

1.1%

2.30%

2016.02.23

1.10178

1.10521

1.09894

-0.10%

0.6%

1.59%

2016.02.24

1.10130

1.10458

1.09565

-0.04%

0.8%

0.98%

2016.02.25

1.10177

1.10495

1.09861

0.04%

0.6%

0.88%

2016.02.26

1.09292

1.10676

1.09110

-0.80%

1.4%

-0.64%

2016.02.29

1.08725

1.09619

1.08586

-0.52%

1.0%

-1.02%

(+1 Trading Days)

       

-1.31%

(+2 Trading Days)

       

-1.13%

(+3 Trading Days)

       

-1.55%

(+4 Trading Days)

       

-1.51%

(+5 Trading Days)

       

-1.22%

(+6 Trading Days)

       

-1.18%

(+7 Trading Days)

       

-1.47%

(+8 Trading Days)

       

-0.92%

(+9 Trading Days)

       

-1.23%

(+10 Trading Days)

       

-1.21%

(+11 Trading Days)

       

-1.04%

(+12 Trading Days)

       

-1.04%

(+13 Trading Days)

       

-0.27%

(+14 Trading Days)

       

-0.51%

(+15 Trading Days)

       

-0.74%

(+16 Trading Days)

       

-1.40%

(+17 Trading Days)

       

-1.94%

(+18 Trading Days)

       

-1.70%

(+19 Trading Days)

       

-1.98%

(+20 Trading Days)

       

-2.15%

TCI on GBPUSD

TCI on GBPUSD reached -5.81% in the 26th of February 2016, a general oversold level for Forex assets. Afterwards, TCI indicates a clear trend reversal (TCI = -4.24%). TCI signals the opening of long positions on GBPUSD.

Here are the past TCI Indications regarding GBPUSD and the forecast for the next 20 trading days. (Press the following slider to reveal TCI indications).

Table: TCI on GBPUSD

Date

Close

High

Low

Change (%)

Volatility (%)

TCI

2016.02.05

1.44959

1.45904

1.44511

-0.62%

1.0%

-0.66%

2016.02.08

1.44298

1.45459

1.43509

-0.46%

1.4%

-1.40%

2016.02.09

1.44703

1.45148

1.43772

0.28%

1.0%

-0.97%

2016.02.10

1.45226

1.45776

1.44369

0.36%

1.0%

-0.33%

2016.02.11

1.44744

1.45627

1.43821

-0.33%

1.3%

-0.88%

2016.02.12

1.45053

1.45693

1.44421

0.21%

0.9%

-0.88%

2016.02.15

1.44303

1.45344

1.44122

-0.52%

0.8%

-1.10%

2016.02.16

1.43014

1.45150

1.42749

-0.89%

1.7%

-2.73%

2016.02.17

1.42909

1.43382

1.42341

-0.07%

0.7%

-2.33%

2016.02.18

1.43339

1.43936

1.42554

0.30%

1.0%

-1.71%

2016.02.19

1.43942

1.43965

1.42457

0.42%

1.1%

-0.75%

2016.02.22

1.41486

1.43055

1.40564

-1.71%

1.8%

-3.18%

2016.02.23

1.40210

1.41553

1.40067

-0.90%

1.1%

-4.18%

2016.02.24

1.39240

1.40266

1.38775

-0.69%

1.1%

-5.43%

2016.02.25

1.39591

1.39957

1.38989

0.25%

0.7%

-4.11%

2016.02.26

1.38698

1.40420

1.38533

-0.64%

1.4%

-5.81%

2016.02.29

1.39134

1.39458

1.38352

0.31%

0.8%

-4.24%

(+1 Trading Days)

       

-4.25%

(+2 Trading Days)

       

-4.16%

(+3 Trading Days)

       

-3.78%

(+4 Trading Days)

       

-3.02%

(+5 Trading Days)

       

-2.39%

(+6 Trading Days)

       

-2.47%

(+7 Trading Days)

       

-2.85%

(+8 Trading Days)

       

-2.80%

(+9 Trading Days)

       

-2.42%

(+10 Trading Days)

       

-2.84%

(+11 Trading Days)

       

-2.21%

(+12 Trading Days)

       

-2.11%

(+13 Trading Days)

       

-1.75%

(+14 Trading Days)

       

-2.62%

(+15 Trading Days)

       

-2.84%

(+16 Trading Days)

       

-3.12%

(+17 Trading Days)

       

-2.73%

(+18 Trading Days)

       

-2.21%

(+19 Trading Days)

       

-2.06%

(+20 Trading Days)

       

-1.95%


EURUSD AND GBPUSD MONTHLY STATISTICS

March and April may be considered as good months to go long on EURUSD. Here are the Statistics for EURUSD and GBPUSD based on 13.5 years of research by TradingCenter.

EURUSD

AVERAGE EURUSD CHANGE

TIMES (↑↓)

AVERAGE EURUSD DAILY VOLATILITY

FEBRUARY

-0.29%

7 7

0.876%

MARCH

0.26%

7 7

0.859%

APRIL

0.72%

7 7

0.834%

MAY

-0.52%

6 8

0.923%

More EURUSD Statistics

March appears neutral for GBPUSD as it is negative on average (-0.21%) but most of the times ended bullish (8 6).The best month to go long on GBPUSD is April (+1.32%) and (12 2). Remember April.

GBPUSD

AVERAGE GBPUSD CHANGE

TIMES (↑↓)

AVERAGE GBPUSD DAILY VOLATILITY

FEBRUARY

-1.00%

6 8

0.788%

MARCH

-0.21%

8 6

0.772%

APRIL

1.32%

12 2

0.707%

MAY

-0.50%

4 10

0.765%

More GBPUSD Statistics


 

CONCLUSION

The British Pound Sterling is under huge pressure and GBPUSD trades close to the 2009 low (1.3630). The all-time low for the GBP against the USD is 1.0438 (February, 26th 1985). As concerns strategy, we focus on Long GBPUSD positions by targeting a strong momentum that may lead GBOUSD to 1.41 and then to 1.43. In the case of a GBPUSD downtrend continuation the ultimate target is 1.35-1.36.

 

George Protonotarios, Financial Analyst

Free Forex Trading Signals: EURUSD, GBPUSD

TradingCenter (March, 1st 2016)


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