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January 2016
EUR/USD 1M
EUR/USD 1Y
1,2
1,0950
1,18
1,16
1,0900
1,14
1,12
1,0850
1,1
1,0800
1,08
1,06
1,0750
1,04
1,02
1,0700
1
1-Jan
8-Jan
15-Jan
22-Jan
29-Jan
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
MARKET ANALYSIS
Technical Analysis
January was characterized by high instability, despite the fact that the EUR/USD only fell 0.27% during this period.
The MACD started the month below the signal line, reaching the lowest monthly value on 6th January (-0.005474). On the same day, the downtrend was
reversed by a bullish moving average crossover, when the MACD moved above the signal line.
On the 8th of January, the MACD reached above the zero line, signal of a bullish centerline crossover. It kept like this, above the centerline, until the 19th
of January, when this trend was reversed with MACD moving below the signal line (bearish signal). On 28 th January we can see that MACD moved above
the zero line reaching the highest value of the month (0.002853).
January was a month of some instability, where the price kept on swinging up and down, oscillating between 1.0751 and 1.0936 (main range).
We can identify 3 support levels during the month: one at 1.0845, other at 1.0810 and finally at 1.0770. In the other hand we can see 3 resistance levels:
1.0925, 1.0960 and at 1.1000. These levels formed what is called Triple Tops. The formation of triple tops is rarer but its confirmed when the price decline
from the third top falls below the bottom of the lowest valley between the three peaks on the 21st January.
Fundamental Analysis
Calendar
In January, the EUR/USD fell from 1.0861 to 1.0831. Despite the small
variation from these values, it was a very volatile month due to several events.
At the beginning of the month the US had several results better than
expected such as the ADP Non-Farm Employment Change, the trade balance
and the CB Consumer Confidence. These results led the EUR/USD to the
lowest value of the month, reaching 1.0751. But shortly after the Eurozone
results came out and pushed the pair to the second highest value of the
month 1.0925. Meanwhile the FOMC suggested that labor market conditions
improved as economic growth slowed in the last year, and inflation stayed
below the 2% level, with this data they decided to maintain the target range
for the federal funds rate at 0.25% to 0.50%. The monetary policy will remain
accommodative, supporting further improvement in labor market conditions
and pushing inflation to 2%. The ECB will keep the rates low and launch a 1.5
Pedro Guimares
Analyst & Trader
lvaro Leal
Rui Ramos
Hugo Sanches
Analyst & Editor
Joana Silva
Analyst & Trader