Good day forex readers.
Welcome to our weekly forex forecast.
I hope you had a great week earning money from the AUD/USD and EUR/USD.
In the previous AUD/USD forecast we noted that the currency pair was testing the support of 0.6950 and dipped further. The bollinger bands continued to play an important role.
In the previous EUR/USD forecast we noted that the range of the EUR/USD was tight for a number of weeks. As long as the currency pair fails to successfully clear the middle bollinger band, the bearish momentum cannot be considered to be over. Again we should look at the usual figures of 1.08 and 1.12. The upper and lower bollinger bands could be possible support and resistance regions.
Looking at the AUD/USD weekly chart above we note that the currency pair is recovering and it tried to test the middle bollinger band. I would be mindful of the lower and middle bollinger bands as they might serve as immediate support and resistance levels.
Looking at the EUR/USD weekly chart above we note that the currency pair remained capped by the middle bollinger band. This has been the situation for about two months now. This is one of the reason why we believe that bollinger bands are one of the most useful technical indicators for forex.
Over in the Euro Zone, inflation climbed and brought some hope that sentiments are picking up. Having said so, this may be temporary and the European Central Bank will likely remain in a stimulative stance for their monetary policy.
With the slowdown in China’s growth, economies worldwide would be affected due to its global role. Particularly for major trading partners like Australia, the effect would likely be bigger. Oil is bullish having bounced off $30 previously. This likely provides Australia, a commodity based economy some relief for now.
Next week brings the Reserve Bank of Australia cash rate event, US Non-Farm Payroll and the ECB president is due to speak too.