Good day forex traders.
Welcome to our weekly forecast of the popular AUD/USD and EUR/USD currency pairs. I hope your week was a positive one. In forex we are looking for steady consistent gains rather than quick highly risky adventures!
In the previous AUD/USD forecast we note that the currency pair had a bullish spike followed by a reversal. Profit taking might be happening. 1.0440 might be a support if bearish pressure returns. For the EUR/USD we noted continued bullish moves but based on previous price actions, 1.3400 might pose a strong challenge to the bulls.
Looking at the AUD/USD chart we note that the currency pair was bearish. In the beginning of the week, the currency pair tried to recover the bearish drop but the AUD/USD gave way to bearish pressure and ended the week after testing the support region of 1.0480. In the coming week, continued bearish pressure if any will need to overcome the support region of 1.0440 – 1.0480.
Looking at the EUR/USD chart we note that the currency pair also faced bearish pressure. It tested the support region of 1.3280 on the last day of the trading week. If the bearish pressure continues next week, we will need to see 1.3280 taken out first before the currency pair dips further. Otherwise the bullish target will probably be the resistance of 1.3400.
Australia’s latest unemployment rate increased to 5.4% but experts believe that the Australia government supportive measures have yet to flow through to the entire economy. In view of this, we may see the Aussie dollar in a moderate range rather than a long term trend for now.
As far as the Euro Zone is concerned, recent sentiments are less negative. The ECB’s stance is rather positive these days and it was reported that the ECB believes that the Euro Zone will be out of recession later this year. If indeed so, our longer term outlook for the euro currency will be probably bullish. However in the meanwhile we still need to consider immediate sentiments and hence support and resistance zones are still crucial.
On a side note, the World Bank and the German government both reported lower revised growth forecast for the global economy and German economy respectively. This may start the year on a cautious note.