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Main » 2016 » May » 4 » Forecast EURUSD: Does a long-term downward trend will continue
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Forecast EURUSD: Does a long-term downward trend will continue
 
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The currency pair EURUSD, despite the prevalence of long-term downward trend and the fundamental factors that weaken the euro continues to grow. Resistance range 1,1400-1,1500 overcome, reached mark of 1.1600, from which began a downward correction.

 

 

An important volume level of support is in the range of 1.1394. Repeated testing it and bounce him up is more likely to contribute to the continuation of the company long-term trend for the euro, dated March 2015. The immediate aim of growth - the maximum price in August 2015 in the area of ​​1.1712.


Break of 1.1394 support downwards and consolidation below it will increase the chances of the euro decline in the area of ​​1.1300.


fundamental analysis


It is possible to allocate the basic fundamentals that support the growth of the dollar and weakening euro:

- Ultra-long-term ECB policy to credit growth, inflation and stimulate the European economy;

- Economic and political issues within the European Union;

- US monetary policy tightened and is aimed at the gradual rise in interest rates;

- The US economy is facing macroeconomic data looks healthier economy in the eurozone.


Fundamental factors that weaken the dollar and give impetus to the growth of the euro:

- Soft tone of Fed statements. The minutes of the last Fed meeting points to the "very gradual" increase in interest rates, moderate activity of the American economy. It appears undervalued probability of rising interest rates in the US in the current year;

- Harsh criticism of the ECB's monetary policy on the part of Germany.


Synthesizing the above fundamental factors, we can assume that as long as the Fed keeps the "dove" policy and not in a hurry with a further increase in interest rates, the euro may maintain the momentum of growth, despite the discrepancy between the Fed and the ECB's monetary policy.

Technical analysis

Consider the long-term prospects for the EURUSD daily chart.

Until March 2015 the euro was a strong down trend, indicated by a green arrow and having a level at least a month, because brown moving average, showing the monthly trend is directed downward. March 16, 2015 the downward trend was halted, which later turned into a three-wave correction up, marked with red arrows showing the weekly trend. The third red wave up the minimum target for the red fibosetke 138% (1.1857) 1 red wave has not been achieved, but the internal target in the red wave 3 on the blue fibosetke was 262%. The third wave can be regarded as formed, and red three-wave upward movement - formed corrective upside down relative to the green trend.


August 24, 2015 from 1.1712 took an active downward movement weekly level almost reached the point of the start of the upward trend since March 2015. The movement performed internal fibotseli blue, while a long-term upward trend is not broken.


On 3 December 2015 the euro is in an uptrend, which overcame the gray price resistance zone and fibotseli 162% (1.1392) from the first blue wave. Fibotsel reached 200% (1.1597) 1 blue waves. The graph in blue boxes marked underperformance, the likely growth in the euro target after a possible retest of gray price range already in support. According to the wave theory, the continuation of the upward trend is more likely after updating the maximum 1.1712. The next target could be 1.1800 area.


The graph all moving averages, except for the older brown disclosed up, confirming the upward trend. Price low in the waves on the blue arrows rising, price highs sluggish, but also growing. However, almost horizontal arrangement of green medium, or monthly trends, says uncertainty "silnodolgosrochnoy" tendencies euro's decline.

Consider the 4-hour chart of EURUSD

With the volume of the profile indicator since the beginning of the June contract specified a maximum volume level of the first red waves up to 1.1394 area. On the red profile visible accumulation of volume at the top of the profile, which shows the interest of market participants to move the price up.


Veer average on the chart to open up correctly, confirming the upward trend EURUSD.


The estimated 3 red wave up the maximum amount of movement has gained in the area of ​​1.1308, at its base.Downward correction could reach the bulk of support in the 1.1394 area, as well as continue lower to 1.1308.Reaction and price fixing in relation to these levels of support will determine the direction of movement of EURUSD in the medium term.

 

Analytics ALPARI

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