It was a nice week, yeah. Congrats to all who followed my previous EUR/USD forecast
. Recently all are talking about coming recession
. But is it really coming? – I don’t think so. And I want to give you a few arguments and charts I have taken from Fed website.
Many refer to jobless claims in their recession prediction. But the thing is there is a lot of noise in this weekly data. It is just an indicator of changes in employment and unemployment. So, better focus on these two main factors directly and you will not get lost. As you see even ‘noisy’ jobless claims are in the strong downtrend.
Consumer and business sentiment used to be considered as important recession indicators too. Few months before the last two recession both data declined. But learn from history. Both sentiments gave lots of false signals. So, we can’t rely on this data.
What really matters is auto sales and housing permits. But both are in the strong uptrend, despite some small declines in from time to time. So, we may conclude that US economy is still strong. The credit-to-GDP ratio doesn’t show danger too.
I have to agree cycles will change soon. Besides, it’s a fact that recession is the logical end of all strong bull runs. But it’s not time yet. There is no reason to talk about the recession this year. But let’s come back to EUR/USD
Last week pair was under very strong pressure. Traders didn’t get any pullback. I believe it made you happy ? Anyway I don’t think we will reach our target 1.11200 without a corrective wave. So, watch 1.12650 and 1.13600 as potential sell zones. As I previously mentioned I see an extension of this downtrend to 1.1070. I have to admit that price action doesn’t show yet how the trend will develop. We need a few more sessions to make a more accurate forecast. But based on classic technical analysis we should see move similar to this chart below. I will keep my trading signals subscribers updated about entry points and changes in the forecast during coming trading week.