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EUR/USD Forecast 18 Mar 2016

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EUR/USD Forecast 18 Mar 2016
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EUR/USD decreasing during Asian session

Yesterday, the speculation of large investors played a greater role than fundamental data. As a result, the pair EUR/USD was able to reach the mark 1.1343.

However, it is worth to say some words about the positive economic data from the eurozone. In February, core inflation rate rose by 0.8% vs. forecast 0.7%. In January, the eurozone trade balance also rose.

The US balance of payments for the 4th quarter is really disappointing. The negative balance for the previous period (Q3) was revised from -125 billion to -130 billion, for the 4th quarter amounted to -125 billion vs. -117 billion.

As we predicted yesterday, when the big investors will complete the redemption, we can see the strengthening of the US dollar. Speculative phase lasts an average of 3-5 days. Now, two scenarios can be considered for the pair EUR/USD.

The first scenario is the consolidation of EUR/USD as we will not see the significant economic news the next week.

The second scenario is a reversal of the pair on a back of profit taking by big investors. However, we consider the first scenario and expect consolidation of the pair EUR/USD in the range of 1,1325 - 1,1385.

How to trade

We would buy CALL options if the pair is able to break up the level of 1.1320.

Asset: EUR/USD
Direction: Call
Target price: 1.1320
Expiry time: 21:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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