Today we want to share with you our FX_IDC:EURUSD perspective as it currently flirts with a very decisive zone at 1.05.
Currently market flirts again with the 1.05 level as it seems to be a very desicive level for the market weather new sentiment will kick in or not.
Current fundamental important facts to consider:
- France latest polls as Macron gained 2% (now 27%) and overtook Pen (25.5%)
- FED rate hike (rate odds jumped in previous days significant higher as they currently are in 77.5% ( FED watch) for a march rate hike of 25 basis points, therefore USD could gain significant strengths. Today Yellen will talk and this may be a significant day for the 1.05 level.
- And of course the other important factors the European Union currently faces.
Divergently, as we look at our intermarket indications we need to be careful, as they currently still warn for a downside moves on mid-term.
We always mention the importance of intermarket flows, as we believe that investors only repark their money due to sentiment and global macro-economic conditions. Therefore, we always keep in mind the in-and outflows with the help of our intermarket indications that lead us towards better timing when making a trading decision. As you might know that timing is one of the most important things when it comes to trading together of course with risk/money management.
As seen in the chart, two of our three intermarket indications showing a tick to the upside as they currently moving in extreme areas territory which might indicate a soon inflow of capital from other asset classes. We take into regard always the BIG 4: Currencies , Bonds, Stocks and . Only the FX_IDC:EURUSD /Indices ratio shows still more potential to the downside as capital may still flow into Indices. Investor may move their capital to indices. This action has still not reached its extreme!
Looking at the technical perspective and current trading range, we see a ranging scenario on midterm. The FX_IDC:EURUSD moves between 1.0825-1.05 (besides on spike to the downside after rate hike in December 2016. If the FX_IDC:EURUSD breaks the on daily close we might consider that the FX_IDC:EURUSD moves higher towards upper range zone. However, if todays speech by Yellen and +VE US Non-Manu figures arrive, we might turn. Importantly is to consider the situation in France and the two parties.
So, summarizing everything together, we believe that FX_IDC:EURUSD is currently at a very decisive zone and we need to take care. We will closely watch the actions of investors regarding capital movements and the fundamental perspective within the EU and FED rate probability. All these factors together we are currently at mid-term turning points where a move to the upside is also possible!
Either way we will keep you updated with possible trading setups!
As always, trading is a probability game nobody is 100% right and always use a stop-loss when trading. Trade with care.
We wish you much success,
The Secrets2Trade Team