Free Forex Trading Signals: EURUSD, GBPUSD, USDJPY

Historically, December is the best month to buy the Euro against the USD.

□ Assets: EURUSD, USDJPY, GBPUSD

□ TCI Forecast: Given neutral news, the Euro is expected to turn bullish against the US Dollar (↑), starting a new uptrend in the first few days of December 2014.

□ Potential Reversal Dates: November 26, 2014, or December 3, 2014 (based on TCI readings).

In most of our 2014 Forex reports, we have emphasized the strength of the US Dollar against other majors. The USD is in a strong uptrend against EUR and JPY due to the growing US economy and the expected rise in US interest rates starting in 2015. Meanwhile, many other major currencies suffer from slow growth or recession, as with Japan. Considering these fundamentals, the long-term USD uptrend will likely continue in the coming months. Although the USD uptrend is strong, corrections are inevitable after large gains. Our analysis shows that December 2014 will probably be a month when the US Dollar loses some ground (corrects) against other majors, especially the Euro.

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Evaluating the Previous Trading Signal from TradingCenter.org

Our previous trading signal was one of the best we’ve ever published on TradingCenter.org. Not only did we forecast the USD’s rise against all majors in November 2014, but we also predicted the exact timing of the new uptrend starting in the last days of October.

We said exactly: “USD correction is coming to an end; we expect the formation of a new USD uptrend (↑). The new uptrend is expected to start in the last few days of October 2014 and peak by late November 2014.”

At that time, USDJPY was trading at 106.875; now it is around 118.00. That’s a huge gain in pips in just one month.

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Forex Market Current Outlook

The Japanese Yen has faced heavy selling pressure since October 31, 2014, after the Bank of Japan announced more stimulus and following a disappointing GDP report. The British Pound Sterling is also under pressure due to weak inflation data from the Bank of England. In the Eurozone, the Euro continues to struggle with slow growth and low inflation, and drops every time ECB President Mario Draghi speaks. If you hold a long Euro position, you don’t want to hear Mario Draghi speak these days.

In such a challenging environment, the US Dollar is seen as a ‘safe haven’ for global currency investors. In this analysis, we will examine what’s next for the US Dollar against other major currencies.

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TCI on EURUSD, GBPUSD, and USDJPY

The Trading Center Indicator (TCI) is a unique technical analysis tool developed by TradingCenter. 🔗 More: » Trading Center Indicator (TCI)

Here are the TCI indications for EURUSD. As shown in the table below, TCI identified a local low of -4.67% on November 6, 2014. The next day, EURUSD rose by +0.64% but then turned bearish again. Later, TCI marked another local low on November 21, and EURUSD reacted the following day.

Looking ahead, TCI points to a new low around November 26 (+2 days) and again on December 3, 2014 (+7 days). It might be better to wait until early December to go long on EURUSD.

The TCI readings for USDJPY are extreme (over 10%), but when major fundamental changes happen—like those in the Japanese economy—no technical indicator can fully predict what comes next. Most likely, USDJPY will test the 121.00–122.00 range before a significant correction takes place.

TCI shows that the British Pound is clearly oversold against the US Dollar. We can expect a bullish GBPUSD trend, similar to EURUSD, during December 2014.

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Forex Currency Statistics

Here are the December statistics for EURUSD, GBPUSD, and USDJPY, based on 13.5 years of research by TradingCenter.

Table: Forex Market Statistics

MONTH DECEMBER	AVERAGE CHANGE	TIMES(↑↓)	AVERAGE VOLATILITY
EURUSD	1.95%	8↑ 5↓	0.817%
GBPUSD	0.37%	5↑ 8↓	0.783%
USDJPY	0.89%	7↑ 6↓	0.778%

As you can see in the table above, the Euro usually finishes the year very strongly.

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Important Forex Market Updates Over the Past Few Weeks

■ US consumer prices rose 1.7% in October year-over-year, unchanged from September.

■ US initial jobless claims recently fell to 291,000, slightly above the expected 284,000.

■ Existing US home sales in October reached 5.26 million, up from 5.18 million previously.

■ A recent Fed paper stated that “the risk of high inflation in the next one to two years remains very low by historical standards.”

■ Japan’s GDP contracted by 0.40% in Q3 2014 compared to Q2 2014.

■ The Bank of England recently warned that UK inflation is likely to fall below 1% within six months and expects inflation to stay below the 2% target for the next three years.

■ Germany’s final Q3 GDP data confirmed local economic growth of 0.1% quarter-over-quarter, a rebound from -0.1% in Q2.

 

■ George Protonotarios, Financial Analyst

Free Forex Trading Signals: EURUSD, 25th of November 2014