The currency markets continue to show promise with the USD maintaining its relative strength against its rivals. And as the US President, Donald Trump, shows optimism towards striking a major trade deal with China, the greenback could continue to upstage its rivals in the Forex market throughout the rest of the year. In this release, analysts at DeskTrading.com delve deeper into the currencies markets and provide an expert opinion on trading the EUR/USD currency pair.
The pair continues to inch towards the yearly lows reached in mid-August, but somehow appears to be holding firmly just above that level, 1.1300. However, the Euro’s strength to hold on could be tested further in the coming days as the U.S. Department of Commerce makes major announcements on the economic front.
The European Union too is scheduled to make a few announcements that traders will be looking towards to with the likes of France, Germany, Spain and Italy all issuing key economic updates. Here, DeskTrading.com discusses how traders could take advantage of these events for potential profits.
The EUR/USD currency pair has been on a downward trending movement since mid-October 2018, and this is likely to continue to the foreseeable future should the U.S. and China strike a mega-trade deal as recently revealed by President Trump.
Nonetheless, from a technical perspective, the bulls will be optimistic of a potential reversal given the limited room down below. As noted at the beginning, the EUR/USD currency pair is currently hovering just above the yearly lows, which means that for it to drop further, then new grounds will have to be breached.
Traders will be expecting the pair to continue holding firm just above the 1.1300 zones (S1) with potential target profit zones for the bulls at (R1) at about 1.1400, (R2) at about 1.1475, and (R3) at about 1.1520 well within reach should a rebound occur.
On the other hand, the bears have one realistic target to look at in the short-term, which could be breached in days. Represented by (S1), the 1.1300 support level, is also the current yearly low, which means a retest presents the bears with a near perfect opportunity to profit.
Nonetheless, with the Stoch RSI indicating that the pair is currently oversold, it is possible that some shorts could rush to cover their positions thereby creating more impetus for the pair rally upwards.
The US Jobs report for October 2018 comes out on November 2, 2018, and analysts expect 191,000 new jobs to be added to the economy. This significantly tops September 2018 additions of 134,000. The unemployment rate has also been declining and this is also expected to continue while the labor market impresses with increased average wages.
On the other hand, the EU Flash CPI report was released early on Wednesday and it beat analyst expectation by 1 percentage point. Experts had predicted an increase of 2.1% but the rate came in at 2.2%. The core figures (which exclude inflation) also rose up by 1.1% compared to analyst expectations of 1.0%, and 0.9% reported last month for September 2018.
Generally, these figures are supposed to boost the Euro, but unfortunately, there is so much optimism surrounding the greenback now, that traders are simply not ready to trade-off high expectations on the upcoming US data with the EU economic update.
Not sure how to approach the pair going into the new month?
All this information can be overwhelming to some traders, which can lead to rushed decisions that are likely to result in trading losses.
As such, despite gaining access to all this information, some traders still prefer to seek the services of market experts to trade on their behalf via forex managed accounts. With a forex managed account, a trader does not have to subject himself to the unpredictability of the market. But should they wish to have a partial influence on what goes on in their trading account, they can also opt for forex separately managed accounts (FX SMAs) that provide that opportunity.
With Forex SMAs, traders can benefit from the services of the most powerful trading tools in the market through their forex account managers who have access to these tools. They also tap into a wealth of experience from a pool of expert traders working in the managed forex accounts firm.
In summary, the EUR/USD currency pair is one of the most liquid currency pairs to invest in. It has been on a major downward trend over the last few weeks and this is tipped to continue in the coming days. But if a trader is not sure how to approach the market going into the last two months of the calendar year, then they can always seek the services of expert traders via managed forex accounts.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.