Euro expected to soar as dollar faces trade fears
Macro-Economic Outlook:
The US dollar continues to remain bearish for me over on the daily time frame especially against the euro. Fundamentally speaking, the Federal Open Markets Committee is expected to reinforce a cautious, gradual hike. It is highly unlikely that we will see a further rate hike given the current trade tensions faced within NAFTA and China. Informal NAFTA talks will be held for the weeks ahead, but I stay the course that not much headway is expected to be made as history has shown. Furthermore, multiple predictions of tariffs being imposed on China's $260 billion and more of imports will be a heavy hitting influence for retaliation. China has declined further trade talks with the United States as trade tension rises, it could be a sign to let actions speak louder than words.
EURUSD Analysis:
This pair has broken above a key daily wedge consolidation. On this longer term time frame, we can expect further upwards pressure as big position trades are taking place given the fact that price has been unable to push to lower lows. Given the moving average consolidation and acceleration, it is very likely we will see a change in the direction of the momentum for the upcoming weeks. Friday's bearish close must be taken with caution as it simply signals traders profit taking or exiting their positions before the weekend. We cannot let that effect make it a determiner for the retracement. Stay tuned and I will keep you updated as to whether that level chooses to hold up.
The US dollar continues to remain bearish for me over on the daily time frame especially against the euro. Fundamentally speaking, the Federal Open Markets Committee is expected to reinforce a cautious, gradual hike. It is highly unlikely that we will see a further rate hike given the current trade tensions faced within NAFTA and China. Informal NAFTA talks will be held for the weeks ahead, but I stay the course that not much headway is expected to be made as history has shown. Furthermore, multiple predictions of tariffs being imposed on China's $260 billion and more of imports will be a heavy hitting influence for retaliation. China has declined further trade talks with the United States as trade tension rises, it could be a sign to let actions speak louder than words.
EURUSD Analysis:
This pair has broken above a key daily wedge consolidation. On this longer term time frame, we can expect further upwards pressure as big position trades are taking place given the fact that price has been unable to push to lower lows. Given the moving average consolidation and acceleration, it is very likely we will see a change in the direction of the momentum for the upcoming weeks. Friday's bearish close must be taken with caution as it simply signals traders profit taking or exiting their positions before the weekend. We cannot let that effect make it a determiner for the retracement. Stay tuned and I will keep you updated as to whether that level chooses to hold up.
Trade active:
I just took a trade in this pair.
Comment:
Off to a good start, strong 4H move signalling trade is holding up.
Comment:
I'm still holding onto this position. However, will consider to possibility of closing it out IF that level is breached. The Feds is expected to raise rates by 25 bps. I'm willing to bet against it on trade fears, but markets are currently pricing it in. We may very well expect it.