Good day forex traders.
Welcome to another review of the currency pair. I hope your past week was of a good forex performance.
In the previous forecast we noted that the currency pair was facing bearish pressure. Sentiments were leaning towards a stronger US dollar as nothing significant was seen to suggest a slower than expected interest rate hike.
Looking at the EUR/USD weekly chart above, we observe that the currency pair is easing down from a peak of 1.2 +. Any return of bullish momentum is like to push for a target of 1.2.
As the currency pair eases, the immediate bearish support will likely be the middle bollinger band. Should further bearish pressure build up, the next support is likely to be just below 1.15 as per the yellow line.
In our recent US Non-Farm Payroll report, we noted an unexpected dip of jobs which is believed to be likely due to the hurricanes. It is of a general belief that the employment situation remains positive. Hence the October US Non-Farm Payroll will probably not affect the general expectations of a robust interest rate hike plan by the US Federal Reserve.
BBC reports “
Even if wage inflation is weaker than the report suggests, economists said they did not see anything in the September report to dissuade the Federal Reserve from raising interest rates before the end of the year, as expected.
Ian Shepherdson of Pantheon Macroeconomics said: “Unemployment is what matters, and this report therefore makes a December rate hike even more likely.”
Revised jobs estimates for July and August showed US employers added 38,000 fewer jobs than previously reported.
But Mr Shepherson said he expects recovery to begin in October, with a bigger rebound in November. “
We have US FOMC meeting minutes and US Retail Sales due in the upcoming week. Both are usually events with high potential impact and hence we need to practice proper money management.
On the euro side, we have the ECB President due to make a speech too. A more hawkish stance than expected is typically good for the underlying currency.
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