Good day forex traders.
Welcome to our weekly review of the EUR/USD. Wishing everyone a great new trading week ahead!
In the previous EUR/USD forecast we noted that the currency pair was testing 1.06. Inflation for the Euro Zone increased and brought about increased optimism towards the economic union.
Looking at the weekly chart above, we note that the EUR/USD currency pair is currently above the 1.06 region. The weekly middle bollinger band is just ahead and may serve as a resistance.
Further bullish momentum may open up 1.08 while 1.06 and 105 remain as potential supports.
Over in the US, many traders believe that an interest rate hike is certain as a result of a positive US Non-Farm Payroll. BBC reports ”
Traders see it as almost “inevitable” the US Federal Reserve will raise its benchmark interest rate on Wednesday after strong jobs growth.
Markets which track investors’ expectations for the key rate give a near 100% likelihood of a rise.
It would be only the third time in a decade that the US central bank has increased rates.
Analysts said the odds strengthened on Friday after figures showed better than expected jobs growth in February.
According to the Bureau of Labor Statistics, US employers added 235,000 new jobs, exceeding economists’ forecasts.
Federal Reserve chair Janet Yellen said last week that the central bank could raise rates in March if employment and inflation figures met their expectations.
The Fed increased rates, which have been at near-historic lows since the financial crisis, to a range of 0.5% to 0.75% in December. ”
A currency will normally receive increased demand as a result of an interest rate hike. The upcoming week would be eventful because besides the US Federal Reserve decision on interest rate, US retail sales data is expected too.
Across the Atlantic, the Euro Zone economy continues to recover although concerns have risen regarding the various political issues such as the Brexit and French elections.