As you know, the US Dollar is the de facto global reserve currency. For decades, it has been considered one of the major factors indicating he health of the entire global economy. Even the OPEC, the BRICS and the EU are still focused on the current financial situation in the USA.
Despite the fact that most experts and currency strategists keep expecting the US currency to strengthen, the US Dollar has recently been showing some weakness against other major currencies.
What expects the US Dollar in 2014? How to predict its behavior? Let’s ask the trading experts working for Masterforex-V Academy?
US Department of Labor Reports Economic Improvement
According to the new governmental reports, the US economy is recovering from the recession. It feels better than some experts think. In particular, the US Department of Labor reports that US businesses created over 110 000 new jobs in 2013. According to President Obama, this fact alone can confirm the current strength of the US economy.
Instantly after the report, US stock indices initiated a rally as a positive response to the improving economic figures.
Still, some other financial and economic experts believe that the US economy hasn’t fully recovered from the crisis yet despite some positive figures reflected in the recent macroeconomic reports. These figures will probably convince the Fed to abstain from further interest rate cuts.
Still, a weaker dollar favours the creation of new jobs but simultaneously makes American imports more expensive. According to Goldman Sachs, a weak dollar is a benefit for the US economy at this point since it will help American businesses to stay competitive in the international arena.
At the same time, the report says that the average household income increased by 4% during the reporting period.
Professional Traders on Dollar Prospects
Market Leader asked Masterforex-V Academy to share their predictions for the near-term future f the American currency:
Whether it is good or not, the US Dollar is still the world’s major currency. Any country needs dollars to buy anything from oil and gold to foodstuffs and other goods.
As for the USA, it may face another danger of defaulting on its debt in February 2014 since the Congress and Obama’s administration failed to compromise and worked out only a temporary solution. The main issue to consider is the fact that in April 2013, the US debt hit the ceiling again. This time it was $16 700 bn. In October 2013, the Republicans nd the Democrats agreed to let the US government keep borrowing until February 7th. Within 2-3 weeks after the deadline, the US Department o the Treasury has the right to take extraordinary steps. All this happened amid verbal interventions. In October 2013, the White Hose promised that no domestic or external financial liabilities would be broken.
Well, to see the overall picture in order to be able to trade stocks or some derivatives, you just have to be a real expert. Forex trading is easier in many aspects. Forex allows you to benefit from controversial economic situation as long as you know some secrets of technical analysis.
As you know the price is an indicator in itself since the market takes into account everything, from traders’ emotions to macroeconomic factors. The right set of tools (in this case 2 indicators, АО_Zotik and WRP_Vsmark) helps to make decent trading decisions based on comprehensive analysis.
As we can see, al the economic factors mentioned above lead us to believe that the most likely scenario for EURUSD is bullish. We can see the price elongate wave C (the blue arrow). The trading experts from Masterforex-V Academy call such waves “the Hound of the Baskervilles by Elder/MF”.
At this point, the price has finished wave A and is developing wave b inside the Hound. The mentioned wave B should be paid special attention to. It hasn’t reached the critical zone yet. Despite the fact, that the price has broken below the bottom of the defensive sloping channel, the indicators show that it cannot be a reversing wave. That is why we expect it as wave B inside another bullish pattern. So we may expect another upswing in the near future. The indicators will confirm this by hitting certain levels.
If you want to learn how to predict currency markets, you are welcome to visit Masterforex-V Academy and its free school for beginning traders and investors.
