Forex euro is at a 9 year low. any predictions on where it's headed in 2015?

i'm not an expert in forex but i do follow the markets. i read about how the eurusd is currently below 1.18 and at a 9-year low.

where and how do you guys predict it will go in 2015 and why?

my prediction is that with the us economy picking up steam, ending quantitative easing, and hinting at increasing interest rates while the eurozone experiences deflation, no move in their already-low interest rates, poor unemployment, greece issues resurfacing, brexit vote possibly coming earlier than thought, nationalist parties on the rise, and the start of their quantitative easing, we'll see the dollar (and us economy) continue to gain on the euro and therefore the eurusd rate will continue to fall below 1.18 as a result (but without hitting parity since the increase in german and eurozone exports helped by a falling euro will offset some of the negatives i mentioned above).

so what do you guys think?

 

Hi mike I think you have a good handle on fundamentals ,but honestly its not necessary ,most retail traders trade tech ,but I do agree

 

Hi Mike,
The resurgence in the US dollar and the rout in the Euro have been a very long time coming. However the moves have been so exaggerated that we are definitely due for a major technical pullback soon as swing traders who have been taking advantage of the gravy train will be looking to book profits. These are the levels where the small fish will keep buying the USD and selling the Euro while the big fish start taking partial profits. Furthermore, from a fundamental perspective, the Eurozone situation cannot get much worse and the US economy is not really sitting on very solid foundations... not that the Eurozone is either mind you, but at least that's already out in the open and any EZ market surprises are almost sure to be positive ones. In the same respect, any market surprises in the US can only be negative because the only news we've heard from there is rate hike, increases in the labour markets etc. This means that the lemmings will continue to favour the dollar and shun the Euro. Meanwhile the sharks are standing by for that inevitable surprise. Which side will you be on when the crap hits the fan? I'm not looking to get into any long term positions yet, but buying the USD or selling the Euros at current levels without a significant pullback is the last thing I would ever contemplate.
Cheers
PT

 

with the eurusd down to almost 1.13, my prediction that the eurusd rate would continue to fall below 1.18 was pretty accurate! not bad for an amateur!

why do you say a good handle on fundamentals is not necessary? it's what i used for my (accurate) prediction above.

when do you think the market is due for a pullback? the eurusd has only continued to fall.

well, syriza winning in greece and the uncertainty about whether they will actually pay back their huge debt is pretty poor news for the euro. then there's the situation in ukraine that's only getting worse and creates more doubt and uncertainty over the situation in europe. if all-out war broke off in ukraine (not likely, but still possible), it would have a huge impact on the eurozone since investments would want to run away from the continent in search of safer grounds and put downward pressure on the euro as investors sold them to cash out of their european investments.

the latest job report was pretty positive with the us economy adding 257,000 jobs. the gov't also raised its previous job creation estimates for december and november up by a combined 147,000, which is also pretty juicy.

thanks for your analysis and please let me know your thoughts on what i wrote above.

 

Hi Mike,

Yes, the fact that Greece is going from bad to worse and the jobs report from the US was quite juicy, are definitely having a further negative effect on the Euro and might continue next week especially now that S&P have downgraded Greece in light of their debt issues and their quasi abandonment of the Troika imposed reforms.

Now I am even more weary of selling the Euro at the even lower levels than last time. The majority of traders say that you have to go with the trend. Whilst I do also believe that, I have a very strict set of rules that I abide by and they have kept my account in positive equity for many years. It is simply this: Do not buy at new highs. Do not sell at new lows. Only sell on rallies, Only buy on dips. Take partial profits on your winners and lock in the rest at break even, and when you feel the move is exhausted, take it all. At this point I have taken all my Euro sell positions and cashed them in, so I'm in a neutral position on all Euro crosses. My next trade in this pair will most likely be to buy. I will look for that when I have a 90% feeling that the fundies cannot get any worse and I have a strong technical signal that it has bottomed out and the sharks are taking the other side of the lemmings' trades northbound. Reversals are always the hardest to read so I like some reliable technical indications before jumping in, and even so, very cautiously with little to no leverage and a stop that makes sense. I then build in more risk as the new trend develops whilst always following by above mentioned rules.

Now from a fundie perspective, with the new developments regarding Greece, it could get worse, much worse. If Greece decides to leave the Eurozone, then many banks will suffer even more than they already have, not to mention the fact that most of that debt is backed up by the ECB which really means that it is backed up the the 17 other Eurozone states. If that happens, then I think it's pretty much game over for the Euro as we know it today. The consequence of such a move is so dire, that the chances of it happening are very slim. Not that it's not possible. Of course it is. Worse things have happened in the past and the future certainly holds some potential for a catastrophic event. However, it's not something I can or am willing to bet on.

Technically, as I said before, as long as the fundies keep pointing south, my charts tell me that the only time I should consider another sell, is after a major pullback (at least 38.2% of the move down from 1.40 (Say around the 1.25 level). However, I will have to re-evaluate the fundies at that time before making a decision, whenever that is. In the meantime, if I see an opportunity to take a buy to ride that major pullback, I'd be willing to take a higher risk on such a position than I would on a sell afterwards.

Cheers Mike and have a great day.

 

Further South - the Daily is on the move again

 

Chart

 

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