The dollar rally and EURUSD

Speculations in the US Dollar have not sparred even such a significant asset as EURUSD. The main reason of uncertainty lies in the manner of how the market evaluates all imperfections of the monetary policies of two sides of the scales: EUR and USD.

Basic arguments

Since the balance in investments and the fair price have changed, re-evaluation of EURUSD is inevitable. However, the valuation of the asset is more connected with the perspectives than the facts. So, the correction is likely to finish, and even the forward rates started to indicate further decreasing, volatility grows.

Technical arguments

Technically, the situation looks like an upward turn. The classical turn figure of "double bottom" is an indicator here. However, the US dollar trend remains upward, and the question is only about the Euro: which direction it will prefer soon.

Analysis of big traders

Picture 1. The price chart of EURUSD and the indicator of big traders for the period of 20.07.2019 - 20.08.2019.

As we can see in picture 1, the interest rate leads the Dollar to growth against the Euro. A sharp USD growth continues to strengthen it, however, not to forget that the probability of a correction is still quite high.

Forecast

Based on the information above we can expect that the asset will have a DOWNWARD movement. It is indicated by the recent growth of USD as well as the ongoing pattern.

To have better control over your positions, we recommend you to use the following indicators:

• Stochastic Oscillator
• Bollinger Lines

Stochastic helps to recognize when the market has a sideway trend, as well as to identify the minimums and maximums. Bollinger Lines helps to see when the market is about to correct.

To keep the level of risk moderate, we recommend keeping the ratio of the positions the following: 4 trades down, 3 trades up.