Forecast: EUR/USD, GOLD, US OIL
|FUNDAMENTAL OUTLOOK
Eurusd will go back to 1.0550, gold to $1200 and oil rebound down from $49 and will retest 47.60
On last Friday Trump hadn’t able to close “Obama care” program and he was “destroyed” by congress. Looking on this, most part of traders decided, that after this fall Trump will have the same situation with all his rest laws, as spending on infrastructure and tax policy. Fake downtrend on dollar was supported with gap on eurusd, when big players on “Trump risks” started to decrease some part of their dollar longs. After that we have break up of daily neck line and by cascade this started to open deals of rest small players.
Big bisuness can't miss new tax policy, so Trump is still on the horse
But they forgot one very important thing: “Obama care” is law just for "simple/small" people and who cares, what is better for them and what is worst? But tax policy is law for big boys, for business and even, if Trump have any disagreements with congress, he will not have them by new tax law. Even, if congress is trying to shows how they are friendly and respectful for society, anyway thay feeds from hands of big business, that interests they are protect and lobbying.
That’s why its very prematurely to say about Trump desister. Same time, we still have differences in % rates with US and EU and EU still not made any changes in their % rates policy or tapering of money (QE) and we didn’t heard any verbal changes about this direction.
Buy dollar on the bottom, sell gold on the top
And the same time dollar now is trading on the best resistance, that we can have for near time. Eur/usd rebounded from long term blue downtrend trend line on price 1.0880 and going to made a false break up of neck line of clear pattern “head and shoulders”, at price 1.0770, with break down of that pair will go to support 1.0560. Also dollar index rebounded up from daily neck line at 98.00 and going up to 101.30. Gbp/usd rebounded down from daily neck line at 1.2620 and already falling to 1.2200. Gold is trading on strongest resistance 1258 and with break down of support 1246 will go to daily neck line 1204 – 1195. Is I need to continue?..
TECHNICAL FORECAST
EUR/USD
Uptrend scenario:
An uptrend will start as soon as the market rises above resistance level 1.0880, which will be followed by a move up to resistance level 1.1030 and uptrend will be expecting to continue, while market is trading above support level 1.0840.
Downtrend scenario:
An downtrend will start as soon, as the market drops below support level 1.0770/50, which will be followed by a move down to support level 1.0500/60.
LONG TERM FORECAST (from March 15/2017)
FUNDAMENTAL OUTLOOK
Fact of % rates increasing is negative event and dollar will fall on over 550 pips during few month to 1.1000 and 1.1250
Today Fed will increase % rates, but this fact will not bring anything positive for dollar for long term perspective, only a few days we can have positive effect. Why? When Fed increased % rate on 16.12.15 eur/usd was rising during 3 days and made +200 pips, but after that felt on -660 pips during 2 month. When Fed increased % rates in second time on 14.12.16, dollar was rising during 2 days, made +250 pips, but then felt on -480 pips during next 1.5 month. Same was with prices on gold: 1 rising +240 (4 days) and then -2100 (2 month); second +330 (2 days) and then -1400 (3 month). This saying, that before rates increasing, market already included this possibility in price and by the fact price start to go in opposite side.
After % rates market will switch his attention on negative factors
We have negative factors for % rates future, as:
- unknown Trump tax policy, that Fed need to include in further rates and as long Trump do not saying about it, as more we have a risk that his promises will not be fulfilled;
- collapsed oil price, that will reduce rising of CPI and will extend terms of increasing for next % rates;
- problem with further federal debt prolongation, that can not to be approved by government for some time, that will create instability and we already had such situation with Obama;
- problem with % rates increasing above 2% at all, because of huge debt that US will not be able to service with big rates.
Same time on previous week Draghi increased ECB expectation relatively to much stronger CPI and increased GDP growth, that is positive for euro.
All this Trump promises without execution and top trading of US stock indexes, with big US dept and without rising of % rates above 2% and to 2%, is looks like a very big HYIP (financial pyramid), that Trump’s brigade trying to sell for us from the market top.
TECHNICAL FORECAST
Uptrend scenario:
Market is trading on strong support 1.0550 - 1.0500, from that we can expect continuation of uptrend to resistance 1.0800 (neck line) and if it keeps on moving up above that level, we may expect the market to reach resistance level 1.1130 - 1.1230 .
Downtrend scenario:
An downtrend will start as soon, as the market drops below support level 1.0500, which will be followed by a move down to support level 1.0400, from that will be possible correction to resistance 1.0500. But if market will keeps on moving down below1.0400, we may expect the market to reach support level 1.0250.
GOLD
Uptrend scenario:
An uptrend will start as soon as the market rises above resistance level 1258.50, which will be followed by a move up to resistance level 1285.
Downtrend scenario:
An downtrend will start as soon, as the market drops below support level 1246, which will be followed by a move down to support level 1195 - 1205.
US CRUDE OIL
Uptrend scenario:
An uptrend will start as soon as the market rises above resistance level 49.00, which will be followed by a move up to resistance level 49.50, 50.20 and 51.00.
Downtrend scenario:
An downtrend will start from key resistance 49.00, which will be followed by a move down to support level 47.60.
by Anton Kolhanov
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