Strong USD Growth In Forecast

US economic outlook in the months ahead favors strong growth as President Trump’s agenda will seek to lower corporate and personal tax rates while eliminating regulations which have limited US growth over the last 8 years.  January economic data confirms a rise in manufacturing, retail sales and new home construction which is expected to witness continued growth into the spring and summer months.

Equities, Oil

US equities have risen over 11% since US elections last November and has many analyst forecast the greatest opportunity for growth since the 1980’s. However, unlike the 1980’s, the current economic growth is coupled with huge oil surplus as opposed to oil shortages as was the case in the 1980’s.

Last week’s US Department of Energy report of 13.8-million-barrel surplus has some economist predicting the greatest opportunity for economic growth and prosperity ever witnessed in US history.  The US dollar is expected to continue broad gains in the months ahead as European and far east markets shift non-USD holdings to the US Dollar.

EURUSD Technical Outlook

As to EURUSD technical outlook, risk for further decline against the USD will continue in the months ahead, as a daily open and lower close below 1.0455 followed by a weekly open and lower close below 1.0326 will confirm new multi-year lows to 1.0038 in the months ahead, while any rise in the EURUSD will be limited to 1.1712.

Near-term, EURUSD’s corrective rise from 1.0339 is complete on the daily charts but requires weekly prices to open and close lower below 1.0642 to complete the rise from 1.0339 at 1.0828.

As to the broad outlook, the fall from the 2014 high of 1.3992 remains active as only a monthly open and higher close above 1.1735 will complete the fall while the 2017 low of 1.0340 supports. Otherwise, look for continued downside risk as a monthly open and lower close below 1.0326 confirms EURUSD will move lower in the months ahead to 1.0038 followed by the 2002 low at 0.8562.