EUR/USD Forex Forecast Review 14 May 12 14


Good day forex traders.


I hope you are having a good weekend so far. I am very tired from the week. Will my dream of running a farm ever come true?

In the previous weekly EUR/USD forecast, we noted a possible bearish target of 1.3. Sentiments were  mainly apprehensive as the poor figures from the US Non-Farm Payroll together with the uncertainty of the polls of France and Greece brought about a negative outlook.




Technical Analysis

The week was basically a bearish week. The forex gap almost closed but the bulls gave up.

Dear readers, this serves as a reminder to us that forex gap do not always close within the week as many have wrongly believed.

SMA 20 = Bearish

SMA 50 = Turning Bearish

With the SMA 50 almost bearish, we may be looking at a sustained bearish momentum soon. The bearish target of 1.28 remains and any bullish correction need to tackle the 1.3 resistance first.


Fundamental Analysis

Greece takes the central stage again as the possibility of the country leaving the Euro Zone swamps the markets with apprehension. Schools of thoughts are divided on this issue as a number of economists believe that an exit of Greece from the euro zone would be manageable while others warn of financial turmoil.

Personally i believe that no one has the right answer. Speculations are aplenty and the situation is pretty much out of any single one’s control. One thing for sure is that such political divide ranks badly with the markets as stability is an important factor for economic growth.

It was reported that the Greek president is meeting up with party leaders in a bid to form a government that advocates remaining in the Euro Zone. This will also avoid having to conduct a second vote. Pay close attention to this. Any developments may change market conditions.

It was reported that European Central Bank council member Panicos Demetriades commented on the need for growth policies to uplift the Euro Zone from the budget deficit crisis. Austerity alone is not enough to solve the issue. Well seems like my opinion on the solution to the Euro Zone budget deficit crisis was right on the money. Ha !

Expect continued volatility and hence do put on your proper money management hats!


Trade Safely.


Related Forex Articles from the Koala Forex Training College.

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  • Hey folks let us have more comments here 🙂  Disqus implemented based on your votes and hence we should have a forex party going on here 😛

  • Anyone still holding on to their longs? If so, why?

    • Brutal though correct.

      • This is an interesting Tweet from Joel Kruger who I follow and really respect: Joel Kruger‏@JoelKruger
        $EURUSD: We are going to look to buy today on a dip to 1.2810, by the 78.6% fib retrace off of the yearly move. This is a short-term play. I do think there could be merit in this call though I am not completely sure that it is for me unless there are some very clear reversal candles.

        • Interesting. 1.2870 now. Not far off.

        • Trading Idea: We are treating Friday’s resistance break as a false break and will look to get long on a resistance break with targets at 20/20/25/25 for 90 pips (closing the weekend gap). If a support forms we will look to get short on that support break (PRO emails will be sent out)
          This suggestion comes from for whom I have a
          great deal of respect. However Steve Nison on page 127 of his book Japanese
          Candlestick Charting Techniques says ‘There is a belief in the West that a gap
          is always filled. I don’t know if this is true, but using the concept that
          corrections stop at a window, once prices try to fill a gap we can then
          consider buying (in a rising window) or selling (in a falling window).’.


          Over the weekend there was a gap down or falling window. The
          bottom of the window was tested as resistance and held. Thus for me it is short
          from there downwards.

  • And BTW am curious.. anyone owns a farm here?

    • JP

       I can sell you a nice shiny new Blue Tractor and attachments!

  • I am struggling to think of a reason to go long and there is a complete failing of my imagination. I see that the Commitment of Traders report which is made up to last Tuesday shows a strong surge to Euro shorts. The Speculators Sentiment Index from Oanda shows that retail forex traders using that platform are 55.48% long. There are only two possible fundamental factors which might send the market long. The first is the continued repatration of Dollars, Yen, Pounds, Yuan, etc to prop up the ailing balance sheets of Eurozone companies including in particular the banks. The second is the desire of many sovereign wealth funds to continue to diversify away from the Dollar. The added attraction of some Eurozone members bonds are that they are paying interest toward 7%. If a fund is seeking short term yield, then that is the place to go. Nevertheless despite this, I shall be looking to sell on any rally. The price action on Friday was anemic. My plan is to be shorting anything above 1.29500 and probably below that level. Finally I think that The Forex Koala is brutal though correct.

    • You were right on the money on short. Look at that crazy gap

  • 1. Like owning a farm brings no heavy work with it??  lol
    2. If you buy that tractor, I come help you, love those type of machines.
    3. It does not dawn in my old bold head with ALL those deficit stories everywhere around. What happened to our old fashioned way of doing business and living.
    At home I was taught that if you did NOT have the money to pay for something, it was simple not yours to be. Soon we will reach the day we go eat in a restaurant and at the end tell the owner we don’t have enough money to pay for the food.
    Let me tell you one thing, if you rent one of my apartments and you don’t pay, you will find out HOW FAST I will put your bud out in the street, hahahahaha.
    SO, basic thought, let those damned governments go bankrupt, somebody will take over and hopefully will do something right this time.
    Moral of this post, the more BS we see in the market, the better I can scalp the M1.  HOERAY !!!


    • I envy you scalper boys lol. I can never do that …

      Yes farming is hard work. But I really love animals and the nature. Imagine awaking up to the sun and fresh smell of the mellows. Life is good.

  • You koalas saw that forex gap? Very bearish I must say. I hope no one was caught.