EURUSD & USDX November 2015

□ Market: Foreign Exchange

□ Assets: EURUSD and the US Dollar Index

□ TCI Forecast: EURUSD to form a new Short-Term Uptrend (↑), bringing it from 1.095 to 1.1350, up to 1.1500

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EURUSD Outlook

EURUSD has been under selling pressure for the past few weeks. This pressure is not fully supported by new fundamental data and appears to be driven mainly by technical factors. Looking at the bigger picture (see EURUSD chart), EURUSD has been trading between 1.080 and 1.149 for some time. Currently, EURUSD is near the lower end of this range, with a recent low of 1.0896. Additionally, the TCI shows EURUSD is oversold and close to a reversal (TCI table below).

CBOE futures (non-commercial positions) show that professional traders have increased their long EURUSD positions and reduced their short positions. In October, these traders were mostly short on EURUSD, so the CBOE data now suggests a possible turnaround. Also, historically, November and December tend to be good months to be long on the Euro. Overall, if news remains neutral in November 2015, EURUSD is likely to start a short-term uptrend toward 1.1350 and possibly up to 1.1500.

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EURUSD Technical Analysis

Here are some important EURUSD Support and Resistance Levels:

■ ST Supply Levels: 1.1050-1.1070 | 1.1100 | 1.1140 | 1.1340 | 1.1385 | 1.1430-1.1500

■ ST Demand Levels: 1.0890-1.0895 | 1.079-1.081

Lower EURUSD levels than 1.079 should be stopped (Stop-Loss entry). Wait until the new EURUSD uptrend is confirmed before you trade more aggressively.

Chart: EURUSD

Chart: USDX

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TCI on EURUSD

The Trading Center Indicator (TCI) is a unique technical analysis tool created by Giorgos Protonotarios for TradingCenter. Below are the TCI indications for EURUSD (use slider).

Here are the TCI Indications for the US Dollar Index (USDX)

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EURUSD Statistics

November and especially December are strong months to be long on EURUSD. December is the best month of the year for going long on EURUSD. Here are the monthly statistics for EURUSD.

MONTH	AVERAGE CHANGE	TIMES (↑/↓)	AVERAGE DAILY VOLATILITY
NOVEMBER	0.49%	7↑ 6↓	0.909%
DECEMBER	1.95%	8↑ 5↓	0.817%

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Trading Strategy & Setup

EURUSD appears to have reached oversold levels in its mid-term range. We expect it to start moving higher from the first week of November 2015. The TCI recommends opening long EURUSD positions after November 4, 2015. Be cautious with your entries, as EURUSD may experience high volatility before a new uptrend forms. The best approach is to open small long positions with a stop-loss at 1.0789. Once the uptrend is confirmed, you can increase your position size and move your stop-loss higher. The first target is 1.1350, with a final take-profit range of 1.1450 to 1.1490.

 

■ Free Forex Trading Signals: EURUSD and USDX

Giorgos Protonotarios, Financial Analyst

November, 3rd 2015 (middle session)

for TradingCenter