EUR/USD – GBP/USD Analysis (2015.12.02)

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EUR/USD Analysis

The two largest economic power poles in the world are indisputably the European Union and the United States of America. The dollar, also called Greenback, is the world’s most traded currency as well as the most widely held, making EUR/USD the most popular and traded currency pair.

Due to its on-going state of liquidity, the pair offers very low spreads as the first choice of any trader seeking a profit from investing in the financial markets. Informed trading decisions and a wide array of trading strategies can be applied to this pair, due to the rich source of economic and financial data influencing the direction of its market price. Therefore, plenty of open opportunities to make huge financial profits arise from the ever-changing level of volatility this pair is characterized by.

The direction of the EUR/USD trading market price is dictated by the comparative strength of these two major leading economies. Simply explained, if all else remains contacts and the American economy registers a rapid growth, it will cause the Dollar to strengthen against a weaker Euro. The opposite is true if the Eurozone experiences a growth of its economy, which will lead the Euro to a stronger state, in comparison to the Dollar which will weaken.

One of the major influences in the change of the relative strength is the level of interest rates. When the interest rates of the American currency are stronger than those of the key European economies, it accounts for a firm U.S. currency against the Euro. If the interest rates on Euro are strong, the Dollar normally drops. Having stated this, the interest rates alone do not dictate the movement of the currency market prices.

The dynamic of EUR/USD is highly dominated by the political instability of the Eurozone, as it is widely recognized fact that the Eurozone is a testing ground for economic and monetary policies. The variety of unforeseen changes and differences between the countries that comprise the EU account for a stronger Dollar against the Euro.

These are the EUR/USD trading features you need to know before investing in the most popular currency pair in the market.

EUR/USD Chart

MARKET ANALYSIS – Intraday Analysis

Upwards scenario: Important fractal level at 1.0623 (R1) acts as next resistive measure on the upside and prevents possible correction formation ahead. Successful attempt to clear this barrier would enable higher target at 1.0636 (R2) and then final aim for today lies at 1.0649 (R3). Downwards scenario: On the other hand successful penetration below the initial support level at 1.0601 (S1) could enable bearish pressure. In such scenario we would suggest next intraday targets at 1.0588 (S2) and 1.0575 (S3).

Resistance Levels: 1.0623, 1.0636, 1.0649

Support Levels: 1.0601, 1.0588, 1.0575

GBP/USD trading

The GBP which is also referred to as Cable, the British Pound or even pound sterling, tends to trade at a wider range during the day. The GBP/USD is renowned as the most erratic and volatile currency pair as it is not unusual to see false alarms and unpredictable movements. Having unforeseeable changes in its price is the major attraction for experiences traders along with a very challenging investment for beginners.

The use of Technical Analysis and of the fundamental news coming from the United Kingdom and the U.S. are common grounds to trading the pair in an informed manner that helps you increase your chances of profitability. There are a couple of good tips you need to consider when you choose trading GBP/USD. Building a definitely good trading strategy is based on always keeping yourself abreast to news of both economies especially to identify and observe unexpected economic news releases which may cause erratic behaviour in this pair’s market price.

GBP/USD Chart

Upwards scenario: Neutral tone remains in power on the hourly chart, however market participants are looking for directional signal. Possibility of price appreciation is seen above the immediate resistive barrier at 1.5095 (R1). Clearance here would suggest next interim target at 1.5111 (R2) and 1.5127 (R3). Downwards scenario: On the downside fractal level at 1.5049 (S1) provides an important support measure. Any prolonged movement below this mark would open road towards to our initial targets at 1.5033 (S2) and 1.5018 (S3) in potential.

Resistance Levels: 1.5095, 1.5111, 1.5127

Support Levels: 1.5049, 1.5033, 1.5018