EUR/USD Technicals : 11-16-2017

Improving Economic Data Bullish For Euro

Improving euro-zone economic performance is bullish for euro. Will the EUR/USD continue the rise?

Recent better than expected German data highlight improving euro-zone economic performance. Germany’s statistics agency reported the German economy grew at above expected 2.8% over year rate in the third quarter when a 2.3% growth was expected. Italy’s growth of 1.7% was also above expectations and the largest since 2011. Euro-zone trade balance surplus in September was also better than expected. Improving euro-zone economic performance is bullish for euro.

EUR/USD

On the daily timeframe, EUR/USD is retracing higher after it hit 4-month low a week ago.

  • The Donchian channel indicates no uptrend yet: it is flat.
  • The MACD indicator is below the signal line and the gap is narrowing, which is a bullish signal.
  • The Parabolic indicator gives a buy signal.
  • The stochastic oscillator has breached into the overbought zone, this is a bearish signal.

We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 1.186. A price point above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the last fractal low at 1.1554. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.1554) without reaching the order we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis SummaryPosition – BuyBuy stop – Above 1.186Stop loss – Below 1.1554

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