Good day forex traders and readers.
Welcome to a brand new week of forex trading. Are you ready? Do remember that proper money management is crucial to forex success!
In the previous EUR/USD forecast we noted that 1.1 would likely be a bullish target and if it is achieved, we might be looking at an extended target of 1.12. As far as bearish targets were concerned, the EUR/USD would need to overcome parity first.
Looking at the EUR/USD daily chart above we note that the currency pair is in a relatively narrow range for the week. While it did test the 1.1 as expected, it did not manage to clear it.
The failure to breach the resistance of 1.1 had sent the currency pair easing down towards the middle line of the bollinger bands. In the near term, it is unlikely to predict the movement of the EUR/USD although the long term trend remains bearish.
The middle line may serve as a pivot with both edges of the bollinger bands as resistance and support respectively. An extended bearish target will be 1.0500.
The US Federal Reserve chair mentioned that interest rate hiking should begin this year but a schedule of subsequent hikes should not be expected. Chair Yellen gave further insights to the factors the US Federal Reserve is paying attention to and it includes inflation and the labor market. She also notes that a strong US dollar may affect the economy of the country.
The current angle of the US Federal Reserve appears to be that of a wait and see approach. A furry of interest rate hikes is highly unlikely and this may dampen some of the market sentiments.
The US Non-Farm Payroll is due this week and hence caution is advised.
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