Good day forex traders.
Welcome to the weekly review of the popular currency pairs. I hope you had a great week trading the EUR/USD and AUD/USD.
In the previous AUD/USD forecast we noted that the currency pair was bullish. It remained above the upper bollinger band. We might see a test of the 0.76 resistance in the upcoming week.
In the previous EUR/USD forecast we noted that bullish momentum might test 1.12 again before targeting the upper bollinger band. The middle bollinger band would be a likely support for any bearish return.
Looking at the AUD/USD weekly chart above we note that the currency pair is bullish for the week. It tested 0.76 as expected.
The currency pair has not established a new range. If it remains engaged above 0.76, we may see it easing into the 0.76 to 0.785 channel.
Looking at the EUR/USD weekly chart above we note that the currency pair climbed for the week. It tested the upper bollinger band as expected.
A continuation of the current region will likely establish a new channel between 1.1 to 1.14.
From a technical point of view, a bullish momentum has yet to be established.
The US Federal Reserve adopted a dovish stance in the recent FOMC event. Interest rate hikes will not happen as fast as anticipated. A number of traders were disappointed. Expectation was that the pace of interest rate hikes would continue. With this change in sentiment, likewise we saw a retreat of demand for the US dollar.
I always mentioned that the higher a currency’s interest rate is versus another, the more likely will it be of higher value. The reverse will likely dampen value.
There is increasing consensus that the worst of the oil slump is over. It will be prudent to monitor this. Should the global economy move ahead, we are likely to see demand for riskier assets and currencies.
In the week ahead, continue to pay close attention to economic releases. Crucial data like the German ZEW economic sentiment and US unemployment claims is expected in the upcoming week.