EURUSD downside capped at around 1.16000

EURUSD has previously found support at around 1.16000 which saw the currency pair bounce from twice. It is possible EURUSD will be fall back down to this level on anticipation of expected Fed rate hike in December.  However, much of this expectation is already priced into the market as of now which leaves room for little downside risk for the currency pair. Also, GOP inability to come to a consensus on tax reform as well as lower than expected inflation data released on Friday can help keep the dollar on the weak side.  Additionally, the 100-day EMA is just below and will provide further support around this key area.

MPW looking to bounce off 100 day EMA on healthcare turmoil

Recent political turmoil regarding a series of White House executive orders has caused healthcare stocks to fall over the last few days. MPW is specifically affected since Trump's cancelled CSR payments can cause serious financial problems for hospitals. It's possible the stock will break below its 100-day EMA, however given the continued higher lows since November 2017, the downside risk is quite low. 

State AGs are already looking to file lawsuits against the recent Trump executive orders which could slow down the White House's agenda in ceasing the CSR payments. However, if there are signs that the lawsuits will fail you may see MPW head for the downside. Also, a bipartisan deal among lawmakers can make sure the CSR payments continue which is bullish for MPW.

At the height of the Republican Obamacare repeal effort in March, MPW had reached as low as $12.00, a key fibonacci level. However, since then the stock has been steadily climbing. Even on news of the signs of failure of the lawsuits against the White House, it is highly unlikely MPW will reach as low as $12.00. A bounce off the area of $12.75 and $12.50 seems more likely. Otherwise we may just see MPW bounce off its 100-day EMA and continue upwards, perhaps on speculation that Trump's executive orders being rendered impotent in the courts.

DXY: quick big picture analysis

As you can see in the monthly chart, DXY has bounced off the key support around the 91.30 to 92.00 level once and might possibly bounce off of that level again after hitting it in August through September. However, this comes after a very strong down trend with large red candles. Along the slightly dovish FOMC minutes recently released as well as the lower than expected inflation reading, the case for further downside is quite strong. Additionally, the Republican's waning chances at obtaining significant tax cuts further weaks the dollar. On the other hand, jobs and unemployment data remains strong. 

The next rate hike in December is almost fully priced into the market as of now. The few who would still be surprised by the time December comes around will be a thin crowd.  Therefore, further downside risks for DXY, in the case of no rate hike in December, are significantly stronger than surprises to the upside. Also, traders will be looking to statements from Fed officials as to clues for pace of future rate hikes beyond December. This should also provide further potential for downside movement in the dollar.

RSI and MACD indicators also suggest further downside bias. 

EUR/USD: quick big picture analysis

Since April 2008 EUR/USD has been in a serious downtrend. However, the currency pair seem to have hit a bottom at around 1.03995. This level has been tested in March 2015, December 2015 and most recently in December 2015. Since then the EUR has steadily gained against USD and has recently breached a .236 fibonacci level seen on the weekly chart. Now the question is does the currency pair continue its upward trend or is this a false breakout?

Fed vs. ECB

The fundamentals tend to show a mixed picture with the Fed on the course of raising rates however lack of inflation has caused the Fed to step back on its hawkish comments, suggesting that the market may have overshot its rate hike expectations. On the other hand, job growth remains steady and the unemployment rate is continually declining in the U.S.

On the EUR side of the equation, the ECB has been slower on the trigger to taper its QE program. However, there has been some recent speculation that the ECB will also begin to announce tapering, catching up with the Federal Reserve's interest rate trajectory. This has partially contributed to the appreciation of EUR against USD.

Chances of bearish reversal

On the other hand, there is still a possibility of a reversal. The RSI indicator is showing an oversold signal while the MACD and Slow Stochastic are also beginning to look more bearish or at least showing down on the bullish side. Also, the latest weekly candle for the currency pair looks quite indecisive, possibly signaling a turnaround.

However, the .236 fibonacci level at 1.16846 could provide significant support. This level also acted as resistance in August 2015 and May 2016.

Watch for Trump stimulus implementation

Traders should watch for whether President Trump is able to implement his financial stimulus and infrastructure plans while facing major political problems in the U.S. and even a possible impeachment. Many analysts have been saying that the market has gotten ahead of itself in optimism for Trump's infrastructure plan to provide much needed fiscal stimulus to the American economy. Bets on Trump's successful implementation of his fiscal stimulus plans would be bullish for the dollar, according to an article in the Financial Times.

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