Good day forex traders.
Welcome to our weekly review of the popular currency pair EUR/USD.
In the previous forecast we noted that the 1.2 region was pushing down any bullish attempt to take hold. Having said so, the bullish momentum was probably still present and hence another test of 1.2 was possible. The US Non Farm Payroll was weaker than expected, delivering a down push on sentiments.
As expected, the bullish momentum wasn’t over and drove the EUR/USD up. I like how everything is unfolding before us with minimal surprise. 🙂
In the upcoming days, if there is no successful bearish recovery to push the currency pair down, 1.22 may be next.
Looking at the daily chart of Gold with the same time frame as the EUR/USD chart, we note that the value of gold went beyond the resistance of $1300 recently. This suggests that the underlying fundamentals of this bullish momentum for gold may be a weakening US dollar.
The Euro Zone recovery is picking up momentum. BBC reports,”
The European Central Bank (ECB) has raised its eurozone economic growth forecast for this year to 2.2%, the fastest growth in 10 years.
ECB president Mario Draghi said the 19-country bloc grew faster than expected in the first half of the year.
It came as the bank kept eurozone interest rates and its bond buying stimulus programme unchanged.
Mr Draghi said the ECB would probably make decisions about its stimulus measures next month.
The ECB is currently buying 60bn euros (£55bn) of bonds a month as part of its quantitative easing (QE) programme.
But analysts expect this to be scaled back in the months ahead given the eurozone’s recovery.
The ECB raised its economic growth forecast from 1.9% to 2.2%, which would be the fastest rate since the 3.0% seen in 2007 before the financial crisis started to bite.
“There was a general recognition of the progress made by the eurozone recovery,” Mr Draghi said.
“It’s robust, it’s broad-based, and it was recalled that six million jobs were created since 2013.”
However, the bank also cut its forecast for eurozone inflation to 1.2% next year and 1.5% in 2019 – below the ECB’s 2% target.
Analysts say this is making the decision on when the bank begins to rein in its stimulus more complicated. ”
Do ensure that you do not take excessive risk. Always practice proper money management.