Good day forex traders.
Welcome to our weekly review of the EUR/USD. I hope you made money in the previous trading week.
In the previous forecast we noted on the sharp decline of the currency pair. The future of a Trump presidency brought apprehension and optimism depending on one’s political affiliation.
Looking at the EUR/USD weekly chart above, it appears that the currency pair has stabilized around 1.06 for now.
As mentioned in the previous forecast, this is a significant support and resistance region. There is a clear need to monitor closely.
There was an article on Bloomberg and it describes the current situation ” The Donald Trump effect lost its sway over global financial markets as investors shifted to new threats including the future of Italy’s government and fled to the safety of bonds and gold.
A gauge of the dollar dropped for a second day from the highest level in a decade as investors weighed the implications of Trump’s spending plans on growth and inflation. S&P 500 Index futures signaled U.S. stocks will slip from all-time highs and Treasuries rebounded. Italian banks led declines in European shares Prime Minister Matteo Renzi faces a key referendum on Sunday that may see voters reject his constitutional reform and prompt his resignation. Gold rose for a second day, cutting the biggest monthly loss since 2013. ”
There is increasing opinion that the new US administration may not spend as much as expected. This may mute the optimism towards the US economy.
The US Non-Farm Payroll is due this Friday. Do be mindful of the extend of impact on the currency pair. Employment figures are scrutinized by traders as it is a good indicator of the economic health.