EURUSD Analysis March 2017 (D,W)
Created on Wednesday, 01 March 2017 12:45
Written by Austin Galt
The French presidential election begins on the 23rd April 2017 with the first round. This should have consequence for the fate of the European Union and obviously the Euro so let’s review the charts and see if we can come up with a prediction of who will win the presidency.
EURUSD WEEKLY CHART
We can see a triple bottom denoted by the numbers 1, 2 and 3. Triple bottoms generally don’t end a trend so I favour one final low below the 1.0341 level before price surges higher thereby making a false break low.
The Bollinger Bands show price recently found resistance at the upper band and I expect price to now head back to the lower band.
The RSI shows some major bullish divergences forming over the last two years as does the MACD indicator.
As for the election, according to the betting markets the anti-EU candidate Marie Le Pen is expected to win the first round before losing in the run-off to the more pro-EU candidate Emmanuel Macron. I am inclined to think this is how things will play out.
Price goes down to make a new low in anticipation of Le Pen winning the first round and then turns back up in anticipation of a Macron run-off win and then surges higher on confirmation of Macron winning. There is still plenty of trading to be done before then so we can update the situation as we get closer to the election.
EURUSD DAILY CHART
An orderly downtrend appears in play with a pattern of lower lows and lower highs and the next leg down looks underway.
The Fibonacci Fan shows the 61.8% angle providing support at the previous lower low while the recent lower high was at resistance from the 76.4% angle. I expect price to move down in this channel between these two angles.
The Bollinger Bands show price around the middle band and perhaps this is where resistance kicks in.
The RSI is marginally in positive territory while the MACD indicator is bullish although it still looks to be generally trending down.
Summing up, I expect one final low before a big rally.