Good day forex traders.
Welcome to the weekly EUR/USD forecast by yours truly The Forex Koala. New readers will find my style
more geared towards the understanding of the currency pair rather then outright trade calls. No crystal ball
here mate! We are interested in the why and how of the forex market 🙂
In the previous EUR/USD updates we note the continued ranging nature of the currency pair.
Looking at the EUR/USD daily chart above we note the immediate resistance seems to be 1.3120 right
now. The round number of 1.3 continues to play a pivotal role and neither bulls nor bears can achieve a full
victory for now. The currency pair is now resting on a bullish trend line from some time back and it will be
worth while to observe if there is any interaction. Many traders often make a mistake of considering short
term factors. From a long term point of view, this ranging is expected as the current region now is probably
the current expectation of the market while the Euro Zone sorts its problem out.
Looking at the current Spain situation, the absence of a bailout is causing apprehension as investors do not
like uncertainty. The recent downgrades by the various credit rating companies also created more aversion.
It was reported that the most recent bonds update show a deteriorating situation. The delay of a much
expected bailout is causing a lost in confidence.
In the meanwhile the US is posing better than usual developments. This is probably holding the currency
pair up rather than a depressing drop.
The US Non-Farm Payroll is due this Friday and hence any sign that the recent positive developments are
not flowing through to the US NFP may result in adverse reactions.