Further U.S. Dollar Strength?

Welcome to the month of October and a new trading week.

After September has proved a very good and profitable trading month, our performance is at +390 pips last month, we are confident that we will catch some good trades also in October.

In the fourth quarter the U.S. dollar’s strength might prevail. This assumption is not only based on the divergence in monetary policy between the European Central Bank and Federal Reserve, but also on the Euro zone’s prospects that macro conditions may deteriorate substantially in the coming months with Germany, often viewed as the driving force of the EU’s growth, being now the “Sick man of Europe”. In other words, with Germany being in a technical recession, the EU’s economy is in the doldrums.

Furthermore, risk aversion and increased haven demand will put additional pressure on the euro and pound sterling.

EUR/USD: As long as the euro remains below 1.0615, we prepare for further losses towards 1.04. On the upside we see a short-term resistance at around 1.0670.

GBP/USD: Below 1.2230 we expect further bearish momentum towards 1.20. For bullish momentum to accelerate we would need to see a break above 1.23.

DAX: Below 15600 the bias remains bearish with the focus turning to the 15000-support.

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Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.

We wish you good trades!

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