EUR/USD [1DC] What Next?! Noise FREE Setup until December 2017.
EURUSD
Hi Guys,
This setup is my own expectation of EUR/USD price action up til December 2017.
Total Direct bearish action: 750 Pips
Total indirect bullish/bearish action: 3000 Pips
1st Impulsive bearish wave: From 1.09400 to 1.06600-SHORT
2nd Impulsive bullish wave: From 1.06600 to 1.09200-LONG
3rd Impulsive bearish wave: From 1.09200 to 1.05000-SHORT
4th Impulsive bullish wave: From 1.05000 to 1.08200-LONG
5th Impulsive bearish wave: From 1.08200 to 1.03300-SHORT
6th Impulsive bullish wave: From 1.03300 to 1.06600-LONG
7th Impulsive bearish wave: From 1.03300 to 1.01600-SHORT
This setup is based on price action during 2016 which has been ALMOST IDENTICAL in its behavior in comparison with 2017 so far!
The price is moving in a huge descending channel and now is forming a big flag that will bounce off the down trend line and break the flag bottom line to 1.05000.to go back and retest recent highs around 1.082. Read the chart with some focus to follow up with the rest.
Remember that this setup can change anytime due to any intense fundamentals that might VOID the whole analysis.
Regards,
Comment:
Guess the price will be hanging here the whole week until the last French round. Maximum price according to the current channel is 1.09775. I am recommending to stay flat atm.
After all of the excitement from the French election, Donald Trump’s “big” tax-reform announcement and the prospect of another U.S. government shutdown, there was very little consistency in USD's performance. The gaps after the election were left unfilled but the gains also did not continue. However next week, the U.S. dollar should experience a more uniform performance ahead of and following the Federal Reserve’s monetary policy announcement. Despite Friday’s rally, U.S. data has been terrible. GDP growth slowed to 0.7% in the first quarter, the worst level in 3 years while Personal consumption was the weakest since 2009. Investors were excited about the rise in prices but higher inflation won’t be enough for the Federal Reserve to raise interest rates in June. There’s currently a major misalignment between the performance of the U.S. economy and the market’s expectations for Fed tightening. Fed fund futures are pricing in a 69% chance of a rate hike in June. This jump occurred after the election in France and in spite of consistently softer U.S. data. Over the past month, job growth slowed to 98K, inflation declined, manufacturing- and service-sector activity slowed as spending turned negative. The only “good” news was in the unemployment rate, which notched lower and in the housing market, which continued to benefit from low interest rates. There’s not enough here for the Fed to be convinced that rates should increase in June instead of September and for this reason, we think the dollar will trade lower into FOMC. The May meeting does not include updated forecasts or a press conference but it is the last meeting before June, which is when a good part of the market thinks the Fed will deliver its next rate hike. With no additional clarity on the president’s fiscal-spending program since the last monetary policy meeting, the central bank has little reason to use this upcoming meeting to signal a June hike is coming. Which is why we think USD/JPY is a sell going into Wednesday’s FOMC meeting. Aside from the Fed, ISM manufacturing and non-manufacturing numbers are scheduled for release along with the latest nonfarm payrolls report. Given the weakness in the February report, a major rebound is expected in April.
Without last Sunday's post-election breakout, the euro would not have been this week’s best-performing currency and politics should continue to provide the single currency with support going into the final round of the French election. At this stage, Emmanuel Macron is a shoe-in to become the next President of France and that reality will be a huge relief for the euro. Italy is the next battleground while Italy's elections won't take place until 2018. Meanwhile, the European Central Bank is worried about inflation even though consumer price growth rebounded to 1.9% from 1.5% in April. This increase was stronger than expected and should ease part of the ECB’s concerns. However spending in Germany and France remain weak according to the latest retail sales reports and even though EZ CPI increased, price pressures in France eased. As a result, French GDP growth slowed to 0.3% from 0.5% in the first quarter. It was no surprise that the ECB left interest rates unchanged this week. Although Mario Draghi recognized the improvements in the economy, he also emphasized the need to keep monetary policy extremely accommodative because he’s not sure that the rise in inflation is durable. Aside from the final round of the French Presidential election, German unemployment and first quarter Eurozone GDP numbers will be in focus next week. Between these events and those in the U.S., we expect EUR/USD to break out of its 1.0850-1.0950 trading range.