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EUR/USD Forecast Update 13 Nov 19

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The EUR/USD is under significant bearish pressure.

Technical Analysis

On the 15 minutes chart, the EUR/USD is attempting to retest the significant sentiment and technical region of 1.10.

On the hourly chart, the EUR/USD is facing support at the lower bollinger band. If the currency pair succeeds, 1.10 will be the next target.

On the 4 hourly chart, we see a similar support at the lower bollinger band.

Looking at the daily chart, we see a double top chart pattern. If this continues, we may be seeing an attempt for the previous low of September.

Fundamental and Sentimental Considerations

The German ZEW Economic Sentiment came out better than expected. It was reported to be -2.1 instead of -13.2. Having said so, it is important to understand that it is still a negative which translates to a poor outlook. As a survey of analysts, this sentiment report holds a weight. Their sentiments may be derived from their working knowledge of the economy and hence may be an early indicator of economic health.

US President Trump mentioned that an agreement on the interim deal could happen soon. However he went on to warn that he was ready to raise tariffs on Chinese imports significantly if no deal is agreed upon. The markets likely reacted with risk aversion as risk appetite retreats. This likely added upside pressure for the US dollar as investors sought “safe haven” assets.

Up Ahead

Here are a number of the significant economic events that are expected.

USA CPI
USA Core CPI

Consumer Price Index is important because the price of consumer goods is a significant component of inflation. If inflation is high, a central bank may increase interest rate to mitigate the situation. Speculations of a possible interest rate hike may generate demand for the currency.

USA Fed Chair Powell Testifies
Testimonials may reveal new insights to economic policies or the question and answer segment may go into unexpected topics resulting in unexpected developments and volatility.

EUR German Preliminary GDP
Gross domestic product is a measure of the monetary market value of all the goods and services produced. It is an overall measure of economic activity and health and thus wields influence on the home currency.

USA Core PPI
USA PPI

Producer Price Index is important because the price of goods sold by producers influences the downstream impact of inflation. If inflation is high, a central bank may increase interest rate to mitigate the situation.

USA Crude Oil Inventories
Movement of oil supply may bring insights to the level of general economic activities. For example, an increasing supply may suggest excessive production or diminishing demand. A reducing supply on the other hand may suggest an economic pick up.

USA Core Retail Sales
USA Retail Sales

Retail sales is a fundamental component of the economy. As consumers spend, it translates to revenue and flows up stream as salaries, wholesales purchase, production orders and so on.

Following an economic calendar is vital so that your forex trading plan factors in the events. Members can log in to their dashboard for an economic calendar.

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Traders should always practice proper money management and seek to understand the underlying tones for the market.

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