Good day forex traders.
Welcome to our latest weekly review of the AUD/USD and EUR/USD currency pairs.
In the previous review we noted that the AUD/USD had a strong bullish momentum. It broke through the bollinger bands and might target the 0.76 resistance.
In the previous EUR/USD forecast we noted that from a technical point of view, the bollinger bands remained as good technical indicators of support and resistance levels. A clean break from 1.1 was needed before any further bullish momentum could be expected. The immediate resistance was likely to be 1.113 followed by 1.12. The extended bullish target would be the upper bollinger band.
Looking at the AUD/USD weekly chart above we note that the currency pair continued the bullish momentum for the week. It remained above the upper bollinger band thus indicating a strong momentum.
Looking at the EUR/USD weekly chart above we note that the currency pair is bullish for the week too. It tested the 1.12 resistance as expected and had since eased off.
In the upcoming week, continued bullish momentum may test 1.12 again before targeting the upper bollinger band. The middle bollinger band is a likely support for any bearish return.
Risk appetite increased for the week resulting in market gains across riskier assets. Traditional safe havens such as the US dollar weakened as a result.
The major unexpected rate cute by the European Central Bank probably set a medium to long term path of currency weakness for the euro. That is if fundamentals will prevail over sentiments. :p
In the meanwhile, this increased easing will probably infuse the market with positive sentiments.
We are seeing a similar stance for the Reserve Bank of Australia. Although the interest rate was left alone, an easing stance could be observed. This will likely float the economy with positive sentiments. It remains to be seen if fundamentals will take over. Usually an expectation of continued low interest rate will weaken a currency due to less demand.
The upcoming week is an important one. We are expecting policy meeting minutes from the Reserve Bank of Australia. This is likely to provide more insights into the Central Bank’s policies and upcoming plans. We are also expecting employment data.
Over in the US, the CPI data is scheduled to be release. The US Federal Reserve’s Federal Funds Rate release is due too. This comes with the FOMC meeting minutes.
Trade safely and do practice proper money management.