■ Market: Foreign Exchange

■ Trading Assets: EURUSD | DXY

In a time of war and economic uncertainty, investors always seek safety and the US dollar becomes the undisputed king. So far, in 2022, the US Dollar gained 12.75% against the EURO and the US Dollar Index (DXY) went up by 15.54%. Since June 2021, the US Dollar index is up 23.6%.

Starting with the US Dollar Index.

Read more: Forex Trading Analysis: US Dollar Index & EURUSD in late 2022

7 Terrible Trading Mistakes That Rookie Investors Keep Making

Seven terrible trading mistakes that rookie investors keep making include the absence of stop-loss orders, investing in one or two trades, and buying low all the time. Others are hubris, being too excited, and following the crowd in addition to dumping shares quickly. These mistakes cost these novice traders significantly.

Knowing them might help you avoid them. Here is a comprehensive overview of these mistakes.

1. The Absence of Stop-Loss Orders

Trading effectively in the markets is impossible if you do not use the tools that are available to you. These tools include stop-loss orders. They will trigger the sale of a particular currency when it reaches a specific price. The idea behind them is to limit your losses as much as possible. However, using them correctly is only possible if you use a Forex demo account. It will help you learn about when to place these orders and their suitable threshold price.

2. Investing in One or Two Trades

The Forex market is a confusing one because things change in an instant. For example, unrest in the Middle East might have an impact on the demand and supply of US dollars. Moreover, the British pound might respond adversely to stalled negotiations with the EU on Brexit. Novices understand these complex scenarios affect the Forex market. Deciphering them is difficult, so they opt for one or two trades. Unfortunately, they might lose everything if these trades go wrong.

3. Buying Low all the Time

Novices believe that lowly priced trades are an excellent choice because selling them at a higher price in the future is possible. Therefore, buying them low increases their profit margins substantially. However, they fail to realize that market fundamentals are at play. That means low positions might spiral downwards. Therefore, buying low all the time might result in losses because these trades might sink. In contrast, high ones might climb even further than they are.

Read more: 7 Terrible Trading Mistakes

The massive increase of money supply in the western economies created an unseen demand for hard assets. Bitcoin is maybe the hardest asset in the world, as its supply is strictly limited to 21 million units. That explains, in short, the Bitcoin surge that we are witnessing in the past year. Now, it is time to be very cautious as the Bitcoin bullish trend is showing signs of exhaustion. The macro-environment is still bullish for digital currencies, but in the short term, we may witness a serious correction, especially as concerns altcoins.

Bitcoin Bullish Trend Showing Signs of Exhaustion

After an exceptional year that brought Bitcoin from $7,000 in April 2020 to $66.000 in April 2021, BTC shows some serious signs of trend exhaustion. Meanwhile, BTC adoption and network security are at an all-time high. So, what is changed? Here are some reasons explaining BTC trend exhaustion:

Read more: Bitcoin Trading Signal April 2021

EURUSD Analysis September-November 2023

■ Market: Foreign Exchange | EURUSD

■ Forecast: The US Dollar looks currently stronger, EURUSD to rebound in November

Since July 2023, the EURUSD has been moving lower. However, we must point out that the pair is short-term oversold. The EURUSD market is mainly driven by inflation figures and the anticipation of the next interest rate decisions. Currently, the macroeconomic data in the US are looking better, and that creates the notion of a declining euro against the US dollar. This downtrend is expected to last until November 2023.

Regarding interest rates, investors expect no more rate hikes (on both sides of the Atlantic). Nevertheless, we cannot rule out the possibility of a final rate hike in the US.

What happens with Interest Rates

□ The ECB has raised the euro interest rate to 4%, or else to the highest level since the launch of the euro. However, Christine Lagarde said that the current key rates are sufficient to contribute to the return of inflation to the long-term target. A statement that was translated by investors as “no more rate hikes”, and the EURUSD started to tank.

□ Across the Atlantic, FED has recently raised interest rates to the highest level of the past 22 years, at 5.5%. According to the FedWatch Tool, the market anticipates no more rating hikes in 2023, and most probably, a decline starting in September 2024.

TECHNICAL ANALYSIS (PriceMomentum chart on EURUSD)

The following graph consists of two charts, a classic EURUSD chart (with RSI Precision), and a PriceMomentum chart on EURUSD.

(1) UPPER: monthly EURUSD chart with RSI Precision (learn more about TradingCenter's RSI Precision)

(2) LOWER: PriceMomentum Chart (learn more about the TradingCenter's PriceMomentum chart) with SMA(233)

Chart: Monthly Chart & PriceMomentum Chart on EURUSD (2020-2023)

□ As concerns the monthly RSI Precision (upper chart), there was a strong rebound at the oversold level of -25 in 2022, currently, it is found at +45 and remains neutral.

□ As concerns the PriceMomentum (lower chart), a strong descending channel is formed. As we can see, there was a first-ever crossunder in mid-2022, and the exchange rate tanked in the following weeks. Currently, EURUSD is reaching again the lower trend line of the price channel. This means that high volatility is to be expected.

SUPPORT AND RESISTANCE LEVELS

Currently, EURUSD is heading lower lower, however, it is short-term oversold. These are some critical support and resistance levels for EURUSD.

■ Strong Supply Levels (Resistance):

(↑) 1.1410 (very-strong)

(↑) 1.1220-1.1270 (multiple-resistances)

(↑) 1.1020-1.1070 (multiple-resistances)

(↑) 1.0835-1.0855

(↑) 1.0750-1.0770 (short-term)

■ Strong Demand Levels (Support):

(↓) 1.0640-1.0630 (short-term, but important)

(↓) 1.0545-1.0535

(↓) 1.0435

(↓) 1.0230-1.0255

(↓) 0.9895

EURUSD MACROECONOMIC OUTLOOK

In the Eurozone, the ECB projects an average inflation of 5.6% in 2023, 3.2% in 2024 and 2.1% in 2025. In the US, annual inflation gradually declined in June 2023, but it accelerated in July and August.

These are some key facts and figures regarding the US and Eurozone:

Comparing United States and Eurozone Economic Figures and Forecasts

EURUSD STATISTICS

Here are the Statistics for EURUSD based on 18 years of research by TradingCenter. Historically, October is a bearish month for EURUSD, however, November and especially December are considerably bullish months.

► More Statistics Here

EURUSD ANALYSIS -Final Words

Probably, EURUSD will continue to move lower in the upcoming weeks, as the macroeconomic data are weaker in the Euro area. However, a strong rebound for EURUSD is expected to occur as the year ends, maybe starting in the second half of November.

■ Free Forex Trading Signals: EURUSD September-November 2023

Giorgos Protonotarios, Financial Analyst,

TradingCenter (September, 19th 2023) *Nothing posted constitutes investment advice