Good day forex traders.
How is your weekend coming along? I hope you made money in forex and did not speculate against that strong down trend!
In the previous weekly EUR/USD forecast, we noted a bearish target of 1.28. Greece was struggling to form a government and prevent a second voting. A few European officials commented on the need to have growth policies among the current austerity measures.
Looking at the EUR/USD chart above, the currency pair did test the previous low above the 1.26 line.
SMA 20 = Bearish
SMA 50 = Bearish
A late week bullish correction sent the EUR/USD right up towards the 1.28 support turned resistance. Any bullish momentum needs to overcome this region first. With the current sentiments still bearish, any spark of risk aversion may send the currency pair tumbling back down towards 1.26.
Economic data from the US was not encouraging this week as unemployment claims suggested a lack of improvement pace sent in the beginning of the year. A job slowdown if you were to call it. The US Treasury Secretary commented that the Euro Zone deficit crisis threatens the US economy. As i mentioned in my opinion article on whether the growth of the US is sustainable, as rosy as it seems, the US economy faces immense economic challenges.
Take a look at the S&P 500 and you can see that crazy drop since the beginning of May.
Across the Atlantic, the Euro Zone reports nothing new. Ie. It continues to be in a crisis mode, Greece continues it’s love hate relationship regarding Euro membership and European officials continue to push for their respective school of thoughts. Growth versus Austerity. Ha!
Not forgetting the bickering and then commitments to ensure the continuity of the Euro currency, Euro Zone and the determination to keep Greece in the Euro Zone. In fact just as recent as this weekend, European Union leaders said in the G8 meetings that they will do the necessary to ensure stability of the financial system in the European Union and continue to cut deficit.
Hmmm do you think there will be a forex gap again this week?
Related Forex Articles from the Koala Forex Training College.