The Euro’s upward price movement against the Dollar is likely to continue irrespective of the currency pair imminent range-bound. The Forex Euro-to-Dollar forecast currency pair price movement has continued to remain in an upward direction after it hit low at 1.0350 during the early part of January 2017.
The 2018 first monthly charts of the currency pairs illustrate that the currency pair moved high in a perpendicular upward direction till when it hit the 200-month moving average (MA) and began to retrace back. The price retraction only occurred momentarily as a result of the opposition caused by the vast MA. A similar reversal occurred in 2017 during the autumn when the euro-dollar pair reached the 50-month MA and bounced back.
Moving Averages and Price Reversals
Moving averages commonly obstructs movement because they serve as a primary trade decision tool for many forex traders. Many forex traders place trade order when the price action moves beyond the 50 MA and exits the trade when it goes below the 50 MA.
Occasionally, substantial price reversals occur at the level of MAs, but currently, it appears not to be the case with the 200-month MA. We project that the uptrend will reappear. If the price action moves beyond 1.2600, it will serve as a bullish confirmation and a complete clearance of the moving average. We may likely see the price rise to 1.2680 and immediately under the R2 monthly pivot. This will prevent additional upward movement.
The pivots of EUR USD
Pivots are estimated from the open, high, close, and low price points of the months before. They serve as a signal that helps traders to predict the trend. Pivots also provide degrees of support and resistance, and this activates short-term selling of currency pair by traders that want to leverage the volatility of the pair.
The Euro traced a volatile slit wave after the meeting held by the European Central Bank (ECB). The earlier buoyancy initiated by the official statement of the ECB soon vanished after the Mr. Draghi revealed in a press conference that they are not going to exit stimulus anytime sooner.
Wednesday, the 14th of March, 2018 saw the release of significant economic data both in the European session and American Session. The key focuses of the statements are:
- Germany’s interest rate
- President Mario Draghi speech
- Employment report
- The eurozone industrial manufacturing industry report
- The United States retail sales
- The US crude oil record weekly release.
The Euro is expected to show reasonable to high volatility. The dollar could replicate same fluctuations because of the release of US weekly oil records.
The surplus release of data in the European session could make the Euro move uptrend to the degree that is beyond anticipation. The high Inflation Rate in Germany and a boost in the employment rate with higher industrial production are likely to boost the prize of the Euro.
Germany’s inflation rate
The graph above illustrates that Germany’s inflation rate is anticipated to rise in the coming years to up to 2.47% in 2022 as opposed to 1.52 percent project rise in 2018.
The US session and financial data releases
Similar to the European session release, the release of the US retail sales is a boost to the dollar rate. The record shows there are higher retail sales in the US and this is a boost to the price of the dollar as it reflects that consumer spending is in the uptrend. This connected to a boost o the economic development and can be estimated by the GDP Growth Rate.
The chart below clearly shows that the US Retail Sales exhibited a volatile trend, with most recent figure reflecting the most significant plunge in near one year.
The projection is that it will reach 0.4% and rise above the earlier figure of -0.3%. Again, waning statistics for the US Business Inventories are likely to boost the rate of the dollar as they show that manufacturers, retailers, and wholesalers are unsold goods. Again, low level of inventories is a sign of a hearty economy as a result of high customer’s demands. The projection thus, is that the rate of dollar increase would be 0.3%, which is below the earlier rise of 0.4%.