Forecasting the future trend of the EUR/USD exchange rate, using advanced technical analysis tools

Abstract

Exchange rate forecasting is a major aspect of exchange rate risk hedging. The objective of this research is to propose a procedure to improve the forecasting of the future trend of the exchange rate. In order to achieve the required results, the use of a set of technical analysis tools is proposed, namely: Elliot waves, harmonic patterns and chartist analysis. The main result obtained in this research is that, by means of the proposed tools and the fractality principle, it is possible to forecast the exchange rate regardless of the time horizon to be analyzed.