Forex Trading Signals

    You are here:  
  1. Home
  2. Trading
  3. Foreign Exchange
  4. Forex Trading Signals
  5. Trading Signals
Forex Trading Signals

Forex Trading Signals: EURUSD October-November 2017

■ Market: Foreign Exchange

■ Asset: EURUSD

It seems the last quarter of 2017 marked a new macroeconomic era for the currencies of developed countries. This era involves a significant monetary shift toward the start of a global economic 'tapering.' First, let’s review our previous Forex trading signal.

Evaluating Our Previous Trading Signal

In our previous trading signal (August 2017), we forecasted a bearish US Dollar market, stating: “The USDX trend is clearly bearish. The key support area for USDX is NOT close. Currently, USDX trades at 95.48, and the support zone starts at 90.80 (S1).” Indeed, the US Dollar Index quickly dropped from 95.48 to below 91.00, finding support around 90.95 points. This confirmed our previous signal.

EURUSD Outlook — Politics Lead, Economy Follows

Recently, the Euro climbed to 1.209, its highest level since early 2015. After the German elections and the unexpected rise of the far-right, the Euro lost some gains. A Deutsche Bank Asset Management team argues that politics now drive currencies, not the economy or interest rate differences. One thing is clear: developed countries’ currencies are more sensitive to politics than ever.

Currently, EURUSD is in a bearish trend likely to reach 1.148-1.144 (S1). However, the last month of the year is traditionally bullish for EURUSD. So, we expect the bearish trend to continue for a few weeks, followed by a strong reversal—probably in late November.

EURUSD Technical Analysis and TCI Chart

The following EURUSD chart (D1) includes a TCI chart for the same period (October 2015 – October 2017). The Trading Center Indicator (TCI) is a technical indicator developed by TradingCenter.

🔗 Link: » More About TCI

Forex Trading Signals

Forex Trading Signals: EURUSD and USDX July-August 2017

After President Draghi’s hawkish speech in late June, Forex investors turned bullish on the Euro. Draghi said no further Euro rate cuts would be needed, signaling a possible shift in the ECB’s monetary policy. As a result, the Euro gained strongly against major currencies (USD, CHF, JPY, and GBP). However, EURUSD has now entered an accumulation phase expected to last until early August 2017.

■ Market: Foreign Exchange

■ Assets: EURUSD | USD-X

Macroeconomic Outlook

In June, the Fed raised the federal funds target rate to a range of 1.00% to 1.25%, marking the third consecutive quarterly increase. This is the highest US funds rate since the 2008 financial crisis. The move reflects record US job growth and the lowest unemployment rate in 16 years. The Fed also announced plans to reduce its large bond portfolio. After three rounds of quantitative easing, the Fed holds $4.5 trillion in bonds (including $1.8 trillion in mortgage securities). Meanwhile, EURUSD rose as President Draghi signaled a monetary policy change and the possibility of a stronger Euro.

US Dollar Index (USDX) Technical Analysis

This is the weekly chart of the US Dollar Index (Futures Contract). As shown, the USDX trend is bearish. The key support area for USDX is not nearby. Currently, USDX trades at 95.48, with the support zone starting at 90.80 (S1) and extending to 86.90 (S2). Note that S2 is based on the A2 trend line, which provides general support. On the resistance side, strong supply is expected at 100.5 (R1), and especially at 104.80–105.00 (R2). The R2 point is based on the A1 trend line, which offers general resistance.

Chart: US Dollar Index (Futures Contract -Weekly)

US Dollar Index Futures Contract (Weekly)

Forex Trading Signals

Trading the Global Financial Markets in the Last Quarter of 2016

■ Forex Markets: EURUSD is expected to keep ranging, GBP may face more selling pressure, and the AUD uptrend could continue

■ Equity Markets: The focus is on the US elections, with odds favoring sellers

■ Energy Markets: A production cut of 1 million BPD is expected in late November; if Iran and Saudi Arabia confirm, crude could reach $60 per barrel

Increased Volatility Ahead of the US Elections in November

In recent weeks, global markets have been quite volatile. UK Prime Minister Theresa May set March 2017 as the start date to leave the EU, pushing the British pound lower against both the euro and the US dollar. As we’ve noted before, EURUSD is likely to keep trading in a range until the US elections. Both the ECB and Fed see the EURUSD rate as a stabilizing factor amid current financial instability.

Equities remain near record highs, but the real test will come after the US election on November 8, 2016. Oil prices have risen following a historic agreement between OPEC and non-OPEC countries to cut production by nearly 1 million BPD in late November.

Foreign Exchange Markets

The British pound dropped further after Theresa May’s announcement to begin Brexit talks by March 2017, aiming for a UK exit by 2019. The pound hit a post-Brexit low against the euro. UK Chancellor Philip Hammond warned of Brexit-related turbulence and noted that the Forex market expects the pound to weaken further.

In September, Jean-Claude Juncker announced plans to double the duration and financial strength of the European Fund for Strategic Investments. He said, “We will ensure the European Investment Fund provides at least €500 billion by 2020 and aim to reach €630 billion by 2022.”

The US Dollar remains quite strong. In September, Janet Yellen said the case for raising short-term US interest rates has grown stronger due to solid job growth. The US Dollar Index (USDX) continues to consolidate ahead of the November 2016 US elections but maintains bullish momentum, trading within the channel (A1:A2).

Forex Trading Signals

Free Forex Trading Signals: The US Dollar Index (USDX) December 2016

■ Market: Foreign Exchange

■ Asset: US Dollar Index (USDX)

Forex Market Outlook

The global markets are still feeling the impact of Trump’s victory. Forex market volatility in recent weeks has been very high. The US Dollar strengthened, with the USDX (US Dollar Index) reaching a 13.5-year high. There was a significant move in USD against the Japanese Yen (USDJPY), possibly indicating that the Bank of Japan is preparing for a long-term weaker Yen to counter Trump’s new trade policies. The Euro is also under pressure due to the rise of right-wing extremism worldwide. In this fast-changing environment, the Fed is expected to raise US rates, while the ECB remains uncertain about how much it will extend its large asset purchase program (QE), which ends in March 2017.

TradingCenter’s TCI on USDX

In the past few weeks, the US Dollar Index (USDX) has risen sharply, as shown in the chart below. The lower chart shows the TCI for the same period. The TCI suggests the USDX may continue to rise after a short-term price consolidation. Below you can see the TCI readings for the past 15 trading days and the forecast for the next 15 trading days.

Chart: USDX 2012-2016 (upper chart), TCI (lower chart)

Our indicator (TCI) indicates that the USDX can grow furthermore, after a short-term price consolidation.

Forex Trading Signals

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

■ Market: Forex

■ Asset: GBPUSD and EURUSD

■ TCI Forecast: GBPUSD Reversal in March and Uptrend (↑)

Nothing is discussed more these days than Brexit. Britain’s prime minister set June 23rd, 2016, as the date for a referendum on Britain’s membership in the European Union. The Forex market reacts strongly to Brexit and its possible effects.

Eurozone Challenges and What They Mean for EUR/USD

Against the general market view, I believe a potential Brexit will hurt the EU more than Britain. It will damage the EU economically, but even more politically and geopolitically. It will also create uncertainty about which country might leave next. The Eurozone will inevitably feel the effects of Brexit in the coming months. Additionally, the problem of uncontrolled immigration in the EU worsens, but can still be managed. In this uncertain environment, EURUSD is trading lower.

Major Investment Banks Forecast EURUSD in 2016

The table below shows major investment banks’ forecasts for EURUSD in 2016. The average forecast is 1.073 for Q1 and 1.053 for Q4.

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

  1. EURUSD AUDUSD Trading Signals May 2016
  2. USDX Trading Signal January 2016
  3. EURUSD and USDX November 2015
  4. US Dollar Index (USDX) and EURUSD October 2015

Subcategories

Forex Trading Signals

Other Trading Signals

🏛️ About TradingCenter

TradingCenter offers key information and tools for learning and trading in global financial markets. It helps investors enhance their skills and gain a deeper understanding of the core mechanics of trading.

☑ Our philosophy: "Think like a long-term investor and execute like a short-term trader"

*Nothing posted on TradingCenter.org constitutes investment advice -TradingCenter.org will never sell you anything, so be aware of the scams

© (2012-2026) TradingCenter.org by G. Protonotarios

Search