EURUSD Bull Rage 2016 FX Outlook: No Mercy

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EURUSD Outlook 2016

Euro Dollar (EURUSD) has  deceived numerous technical traders that attempted to inject a small piece of fundamental analysis into their positions. The European Central Bank (ECB) adopted drastic monetary policy measures to boost the European economy but it appears a weak currency is not part of these measures. Traders that are subscribed to us are well aware that the Fed’s policy differs to the ECB as the US central bank wishes to maintain a weak US Dollar (USD), which often re-ignites the exports sector, thus boosting the US economy.

We have successfully predicted EURUSD retracement and the current crossroads Euro Dollar is facing may lead more technical traders astray.

EURUSD Weekly Chart 7 November 2015

Please click on the chart to enlarge:

EURUSD Weekly Chart 07/11/15

EURUSD Weekly Chart 07/11/15

EURUSD Weekly Chart 11 April 2016

Please click on the chart to enlarge:

EURUSD Weekly Chart 11/04/16

EURUSD Weekly Chart 11/04/16

Due to central banks monetary policies EURUSD is now enjoying safe-haven flows during risk aversion modes in the Forex market. As the currency correlations were mutated we have a fair reason to believe numerous automated trading systems and Expert Advisors (EA’s) in the MetaTrader4 (MT4) or MT5 began malfunctioning and produced hefty losses in the market.

EURUSD Bears’ Massacre

Euro Dollar weekly chart shows the price has reached a fairly strong resistance level, however, an uptrend has been established following the last re-test of the support (lower blue line). The uptrend can easily be seen as the price painted higher highs and higher lows. The last leg higher in EURUSD initiated the third wave, which by the book may be firmer than the past 2 waves.

A dip towards 1.1285 cannot be ruled out and may not negate the bullish projection for EURUSD. Once the price breaks above 1.1495 there is little resistance that may contain EURUSD gains in the market until 1.2095. We are nevertheless suspect we are in front of a much stronger bullish retracement that could drive Euro Dollar towards 1.2500. It is difficult to assess what may be the trigger for the gains at the time of this writing. We believe safe-haven flows and central banks recycling USD into EUR following FX interventions (particularly Asian central banks) may very well initiate the monstrous bullish wave we are anticipating.

ECB Monetary Policy

Monetary policies of the European Central Bank (ECB) and the Fed may counter our outlook for EURUSD but as we stated earlier the Fed targets lower exchange rate as opposed to the ECB. Mario Draghi has a fairly limited time frame to act if he wishes to target a weak Euro in the Forex market but at the time of this writing it is not one of the ECB’s monetary goals. It will be extremely difficult to invalidate the technical projection for Euro Dollar.

We are monitoring all EUR pairs and crosses and will issue intraday trading strategies or appropriate market research when a technical entry is provided to our subscribers. We have been providing forex trading strategies since May 2014, documenting all our trades on the website. If you are not subscribed to us you are welcome to review our trades performance. We offer competitive pricing for all our trading plans.

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