Good day forex traders and readers.
Welcome to another of our weekly EUR/USD forecast. How are you? Hope you are making pips.
In the previous EUR/USD forecast we noted that the currency pair was a doji for the week and our bollinger bands worked. The bearish momentum was rejected by the lower bollinger band and the immediate support would be at 1.09 followed by 1.08.
Looking at the EUR/USD weekly chart above we note that the currency pair was again bearish for the week. It is now below the lower bollinger band.
The bearish targets of 1.09 and 1.08 were achieved. Should the price action remain below the lower bollinger next week, we may be looking at an extended bearish target of 1.05.
Should a bullish recovery return, we will likely see action at 1.08 and 1.09. The lower bollinger band is now a resistance region too.
The US dollar gained in value after a much better than expected increase in jobs as reported by the US Non-Farm Payroll. As I cautioned last week, sentiments from such developments often drive the price action. Many investors see this positive data as an indication that the US interest rate hike is coming soon. A number of them believe that it will happen by the end of the year. An increased interest rate often drives demand and hence the price.
In the meanwhile, the euro zone continues to face uncertainty as recent developments indicate the possibility of further easing. The region has yet to see a sustained recovery.
In the upcoming week, it is crucial to continue monitoring the market sentiments.