The dollar was sharply lower against the euro due to speculation the Federal Reserve is not in their plans to raise the rate of interest.
Because they thought there was room for a rate hike, and this was rejected by the Fed, the chances of the Euro reaches 1.6000.
Fundamental Analysis
Following our line last week, when we took the opportunity to correct a rebound of the Euro ... continuing with the same confidence, we think that the Euro should be strengthened due to a reason Weight: Dollar indexing with oil: OPEC has indicated it will not increase oil production, blaming high prices are due to speculators, this will automatically translate into an increase in oil prices and with this a weakening of the dollar.
Therefore, we believe that the Euro would strengthen against the dollar.
Technical Analysis
could clearly see a price rebound in the bottom of the channel, sending the price up. The figure below shows the price rebound in the channel:
As for our technical indicators have mixed results, with our RSI indicator with a positive slope, and our momentum indicator diverging sloping with the price (low signal) - we suggest that maybe something great can happen. .. and would be a sharp decline ...
Finally, having a closing price at 1.5600 can be taken as exact a psychological ceiling.
For technical analysis we find that the price stays within the channel upward direction, with mixed results indicators, which do not give us great light.
On the other hand, by fundamental analysis, we find that the announcement of OPEC not to increase production still is not built into the price, which on Monday should be reflected.
recommend taking no position, and if the price of Euro rises to 1.5800 area - expected to give technical indicators signal into short position, because we think the price should be maintained within the channel.
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