EUR/USD AUD/USD Weekly Forecast 18 Jan 16


Good day forex traders.

Welcome to our latest EUR/USD and AUD/USD forecast. Hope everyone is off to a good start for 2016.

In the previous EUR/USD forecast we noted that the currency pair was bullish for the week. It did attempt to test 1.08 but the support held. The middle bollinger band worked again. Looking at the momentum, we could conclude that the middle bollinger band resistance was strong. In the upcoming week, we would need to observe the price action in this region. A clean breach might open up the upper limits at 1.12 and 1.14.

Should the bearish momentum return to test 1.08, failure of the support would open up the lower bollinger band as an extended bearish target.

In the previous AUD/USD forecast we noted that the currency pair was bearish. The momentum was strong and it breached the lower bollinger band.

The AUD/USD was testing the support of 0.6950. Should the currency pair continued to develop below the lower bollinger band, we might see further bearish momentum. A failure of the 0.6950 support might see the AUD/USD targeting the bearish target of 0.68.

A bullish return would need to overcome the lower bollinger band. It was a possible resistance region.

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Technical Analysis

Looking at the EUR/USD weekly chart above we note that the currency had once again failed to breach the middle bollinger band. It was a doji for the week.

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The range of the EUR/USD has been tight for a number of weeks now. The expectation of a breakout is increasing. As long as the currency pair does not successfully clear the middle bollinger band, the bearish momentum cannot be considered to be over. Again we are looking at the usual figures of 1.08, 1.12. The upper and lower bollinger bands should be possible support and resistance regions.

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As far as the AUD/USD is concerned, we are looking at a bearish momentum. The currency pair made a new dip this week. It remained below the lower bollinger band after a failed attempt to climb back up above it.

The 0.68 may be a possible support. Any recovery attempt will likely need to overcome the lower bollinger band before a push for 0.7.


Fundamental Analysis

The oil price went into the < $30 usd region this week and this produced apprehension across the markets. Most commodities currencies such as the AUD suffered a drop. The Chinese market remains bearish. As mentioned, the economic powerhouse has an significant impact on the global sentiments. It's major trading partners such as Australia will be affected. Risk aversion seems to be picking up as the gold price climbed. If this continues, we may see a dip in riskier assets and currencies. Next week brings a number of important economic events such as the German ZEW Economic Sentiment and ECB minimum bid rate. Do practice proper money management for your trades.

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