Good day forex traders.
Welcome to our latest EUR/USD review. I hope you had a great trading week.
In the previous EUR/USD forecast we noted that the currency pair was bullish for the week. However it was capped by our lower bollinger band. The narrow range for the week suggested that the price action was limited. There was nothing to indicate that the bearish trend was over and hence the previous bearish target of 1.05 remained.
Looking at the EUR/USD weekly chart above we note that the currency pair was bearish for the week. It remain capped by the lower bollinger band as expected.
A closer observation of the bollinger bands indicates a widening phase. This suggests that the momentum is gaining. As we head into the new week, bearish targets remain at 1.06 / 1.05 and 1.045.
Any bullish recovery will need to overcome the lower bollinger band before targeting 1.08.
The US Federal Reserve meeting minutes indicated a possibility of an interest rate hike in December. As expected, this information probably added to the downside pressure of the EUR/USD in favour of the USD. As mentioned many times, investors generally reward a currency for increasing interest rate.
On Saturday, San Francisco Fed President John Williams mentioned that there is a “strong” case for an interest rate hike in December if the economic data do not disappointment. With this in mind, we are likely to expect increased positive sentiments for the US dollar.
Continue to monitor closely and practice proper money management. As the year approaches the end, lowering volume may create unexpected spikes.