The Previous EUR/USD Trade Signal Confirmation

The previous TCI signal proved to be quite accurate. In our last TCI analysis on EUR/USD, we warned of an upcoming US Dollar gain against the Euro. At that time, EUR/USD was at 1.3089 (February 25, 2013). We targeted the 1.2910–1.2920 area and suggested that a strong turnaround would likely occur once EUR/USD reached this level.

◘ Previous TCI Signal Details: 

-EUR/USD (2/25/13): 1.3089

-Target Price: 1.2910–1.2920  {» What is Trading Center Indicator?}

 

The New TCI Signal on EUR/USD & TCI Charting

MARKET	INSTRUMENT	TARGET	STOP LOSS
	EUR/USD 1.2980 (3/14/2013)	1.3130	Stop-Loss Price: 1.2890

Here is the EUR/USD historical Line Chart (since 1999) along with the corresponding TCI chart for the same period. Today, the TCI is around -8.0%, indicating oversold conditions.

Chart: EUR/USD Historic Line Chart & TCI Chart (January 1999 – March 2013)

TCI in Action: EUR/USD Analysis and Possible Turnaround

Today is March 14, 2013, and the EUR/USD rate is around 1.2980. Intraday, EUR/USD reached the 1.2910 level we identified in our previous TCI signal. Since then, the trend has reversed, and EUR/USD is now trading above 1.2980. The strong rebound forecasted by TCI may have begun. Using TCI again, we will reassess what might happen next with EUR/USD. First, let’s review the recent EUR/USD market data and the corresponding TCI values. All TCI data after the close of March 13 represent a Forex market forecast.

Given the market data and TCI forecast, a turnaround was expected on March 15, 2013. However, it appears the turnaround began on March 14. Markets often move faster than technical analysis predicts. The trigger area of 1.2910–1.2920 was reached on March 14, so a strong rebound may be underway. This rebound could push EUR/USD to 1.3130–1.3160. The strong resistance at that level will influence what happens next, with the next resistance expected around 1.3250.

EUR/USD Mid-Term Analysis

As mentioned in previous analyses, a Euro interest rate cut is likely in the second half of 2013. The Eurozone’s recession is deepening, and lower interest rates could help. Meanwhile, US interest rates are expected to rise.

The German Elections in September 2013

The future of the Eurozone, given Italy’s recent election results, is uncertain. A strategic change is expected after the German elections on September 22, 2013. After these elections, Europe might focus on growth again, which would mean lower Euro interest rates and a more flexible EUR/USD.

The Long-Term EUR/USD Trend

Historical analysis shows the EUR/USD pair moves in a long-term range between 0.80 and 1.60. The 1.60 level was reached in 2008, and since then the long-term trend has been bearish. My forecast is that EUR/USD will reach 0.85 by 2015.

 

□ Giorgos Protonotarios,

for Trading Center (March, 14th 2013)