EUR/USD: January 2017 Forecast - 2 January 2017

Monday, 2 January 2017 20:57

By: DailyForex.com

The EUR/USD pair has had a rough couple of weeks, but we are starting to find support underneath the 1.05 level. However, I am the first to admit that this market probably will pull apart and fall to the downside, so I think there are a couple of things that you should look for during the month of January.

The first thing that I would notice is that there is a lot of noise all the way to at least the 1.07 level. So, while we have formed a couple of hammers on the weekly chart, the likelihood is that a break above the 1.05 level would send this market into a buzz saw of resistance, and I feel it’s only a matter of time before the seller step back into the marketplace. I think given enough time, we are going to continue to go lower.

Interest rates

The Federal Reserve looks to raise interest rates several times over the course of the year from what we’re hearing so far, while at the same time the European Central Bank has extended quantitative easing for at least nine months, and that of course will continue to work against the value of the Euro. Because of this, I am a seller of short-term rallies that show signs of exhaustion, but I do recognize that any move lower is probably going to be very choppy. Ultimately, we could see this market reach towards the parity level, which a lot of analysts have been calling for during the last several years.

The recent consolidation over the last couple of years has recently been broken, and because of that I feel it’s time to go much lower. This will be especially true if the ECB must extend quantitative easing at all, and of course the financial problems in the European Union continue to deteriorate, especially in the banking system that looks so dangerous.

EURUSD

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

DailyForex Newsletter
0 User Reviews

Registration is required to ensure the security of our users. Login via Facebook to share your comment with your friends, or register for DailyForex to post comments quickly and safely whenever you have something to say.

Log in | Create a DailyForex.com Account Now