Free Forex Trading Signals: US Dollar Index (USDX) and EURUSD October 2015

□ Market: Foreign Exchange

□ Asset: US Dollar Index (USDX) and EURUSD

□ Forecast: USDX Local-High on October 9th ,2015, after Long on EURUSD

For the first time, the TCI indicator is applied to the US Dollar Index (USDX). All TCI readings can be viewed by clicking the USDX TCI tab below.

US Dollar Outlook

The Foreign Exchange Market has been volatile lately as expectations for an early US interest rate hike turned out to be wrong. The US Dollar was sold heavily in early October. On October 2nd, 2015, EURUSD jumped from 1.114 to 1.131 almost instantly. This happened because US Nonfarm Payrolls came in at 142,000 instead of the 200,000 expected by most analysts. After the heavy sell-off, the US Dollar quickly regained some ground, showing it is still strong. As the following analysis shows, the US Dollar is expected to remain strong for a few more days before entering a short-term downtrend. 

EURUSD Technical Analysis

Let’s see some important levels for EURUSD:

□ EURUSD ST Supply Levels: 1.1430-1.1465 | 1.1650 | 1.1710-1.1715 | 1.1750

□ EURUSD ST Demand Levels: 1.1135-1.1150 | 1.1010-1.1020 | 1.0800-1.0850

Read more: US Dollar Index (USDX) and EURUSD October 2015

Forex Trading Signals: EURUSD May-June 2015

□ Market: Foreign Exchange

□ Asset: EURUSD

EURUSD Outlook & Forecast

EURUSD is currently in a corrective uptrend after hitting a 12-year low of 1.0461 on March 13, 2015. Today, it trades around 1.1150, fairly close to its recent high of 1.1391. Several factors explain this rise. First, the US economy showed mild contraction in the early months of 2015. Many analysts blame the strong US Dollar for this slowdown. If that view is correct, further USD gains could threaten the positive outlook for the US economy in 2015.

Forecasting EURUSD

Here is our forecast for EURUSD:

■ Short-Term: The short-term trend favors the Euro. The main agreement between the Eurogroup and Greece is expected around May 27th or 29th, 2015. Technically, the support level at 1.1065 is crucial. If EURUSD holds this level, it will signal a strong continuation of the current uptrend.

■ Mid-Term: The mid-term outlook for EURUSD is uncertain. The recent 12-year low suggests the depreciation happened too fast, so the Euro could rebound further against the US Dollar in the coming weeks. There is a possibility that EURUSD could rise to 1.2490. The resistance level at 1.1610 will be important if reached.

■ Long-Term: The long-term trend still favors the US Dollar. In the next 6-8 months, EURUSD is likely to reach 1:1, and technical analysis suggests it could even drop to 0.86. A recent Morgan Stanley report supports this forecast.

Read more: EURUSD Trading Signal May-June 2015

EURUSD & GBPUSD July-August 2015

□ Market: Forex (EURUSD, GBPUSD)

□ Forecast: The US Dollar remains strong

Forex Market Outlook

Despite the difficult political situation in the Eurozone, foreign exchange investors remain fairly calm. The ECB currently appears willing to support the Euro to ease the impact of the Greek political turmoil. This support is temporary, and we should not expect long-term interventions from the ECB against the main market trend.

On the other hand, the US economy is strong based on June’s fundamental data. US retail sales are rising, building permits are increasing faster, and the monthly trade deficit is shrinking (to -$40.88 billion). The US unemployment rate is 5.5%, slightly higher than the forecast of 5.4%.

Regarding the United Kingdom, the BoE expects inflation to rise toward the end of 2015. In June, interest rates in the US, EU, and UK remained unchanged. Given the current economic conditions, US interest rates are expected to rise in the second half of 2015.

EURUSD Technical Analysis

Here is the EURUSD technical analysis chart, showing key supply and demand levels for the currency pair.

■ EURUSD Supply Levels: 1.1280 | 1.1390 | 1.1475 | 1.1645 | 1.1855 | 1.2025 | 1.2345 | 1.2520

■ EURUSD Demand Levels: 1.1020 | 1.0775 | 1.0540 | 1.0475 | 1.0225 | 1.0000 | 0.9855 | 0.9630

Read more: EURUSD, GBPUSD Trading Signals July-August 2015

TCI Forex Trading Signals: EURUSD March-April 2015

“Never Trade against a Major Central Bank”

□ Market: Foreign Exchange

□ Asset: EURUSD

□ Forecast: EURUSD downtrend continuation (↓) after a short-term uptrend correction

EURUSD Outlook

If there is one constant rule in Forex trading, it is: “Never trade against the will of a major central bank.” Major central banks like the Fed, ECB, SNB, and BoJ hold many hidden tools and are ready to manage their currencies based on long-term monetary strategies. Right now, the Fed is the only major central bank comfortable with its currency strengthening. The ECB and BoJ are focusing on flexible monetary policies to try to boost their economies. Meanwhile, the US economy is growing, unemployment is falling, and interest rates are expected to rise in the second half of 2015. In this environment, the US Dollar is likely to strengthen further against the Euro and Japanese Yen in the coming months. EURUSD may even trade around 1:1 soon.

However, since the Euro is near a 12-year low against the USD and the USD has gained about 10% against the Euro in just one month, it’s worth considering a possible short-term Euro correction. According to TCI, EURUSD is oversold, with the indicator again near -11%, similar to our previous EURUSD signal in February 2015. At the time of this analysis, EURUSD trades at 1.0560. With neutral news, EURUSD could rise to 1.0650 or even 1.0750.

Evaluating Our Previous Trading Signal

Read more: EURUSD March-April 2015