eur fundamentals

Euro - US Dollar Long-Term Technical Forecast

I wrote last month that “the monthly close below the trendline that had contained price since 2002 is enough evidence to proclaim the 8 year uptrend complete.  The Fibonacci zone does not begin until 1.2428.  A more likely candidate for support is the 50% at 1.1486, which is also near the 2005 low.  We can only make an educated guess as to what pattern the EURUSD will take to get there.  A likely pattern is a zigzag of sorts, which are sharp.”  The decline has certainly been sharp and I am showing an even more bearish count this month.   Monthly RSI has entered into oversold territory.  Historically, RSI enters oversold before even half of the decline is complete!  In other words, the EURUSD decline is closer to its beginning than its end!  A count that satisfies such bearishness is shown above.  Coming below .8225 would complete a flat that began in 1995.  I’ll look for shorting opportunities, so be sure to check the Daily Technicals.

Euro - US Dollar Fundamental Outlook, Interest Rate Forecast

European and US interest rate forecasts took a clear turn for the worse in recent months, but the difference between said rate forecasts continues to favor the US dollar. In fact, Credit Suisse Overnight Index Swaps show that interest rate traders expect the yield spread between the Euro and US dollar will contract by a whopping 186 basis points in the coming twelve months. After cutting rates aggressively to all-time lows of 1.00 percent, the US Federal Reserve is forecast to raise rates by 53 basis points through this time next year. The European Central Bank, by comparison, is expected to cut rates by a substantial 133 basis points through the same period. All else remaining equal, this will add downward pressure on the Euro-US dollar exchange rate. 

Forex Sentiment and Positioning Forecast for Euro - US Dollar

CFTC Commitment of Traders Report Suggests Euro May Set Short-Term Bottom

Written by Jamie Saettele, Senior Strategist and David Rodríguez, Quantitative Analyst for DailyFX.com

We always want to hear your feedback on new DailyFX articles. Want more articles like this? Less? What do you want to see? E-mail the authors of this report at jsaettele@dailyfx.com and drodriguez@dailyfx.com.

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