Good day forex traders and readers.
We are officially into the mid year and how has forex been treating you so far? I did have a few readers telling me about their margin calls and if only they had proper money management!
In the previous AUD/USD forecast we noted that the currency pair did indeed encountered a support due to the influence of the middle bollinger band as mentioned in my previous forecast. Any bearish return would probably need to overcome the middle bollinger band before any further consideration.
In the previous EUR/USD forecast we noted that the currency pair was a doji for the week. As long as it remained below the middle bollinger band, we won’t exclude the possibility of a bearish drive to the bottom band. The middle bollinger band might now serve as an immediate resistance for the EUR/USD.
Looking at the AUD/USD weekly chart above we note that the currency pair was bullish for the week. It did face supportive influence at the middle bollinger band as expected in my previous forecast.
The 0.94 region remains an immediate resistance for the currency pair. I expect the middle bollinger band to remain as an immediate support for now.
Looking at the EUR/USD weekly chart above we note that the currency pair was bullish for the week too. I highlighted the possibility of a test of the bottom bollinger band and I was right on target. I love it when my forecast works! 😉
The middle bollinger band will be our immediate resistance for the week ahead and I am not ruling out any return of the bearish pressure.
The two major events of the week probably had much influence on the currencies’ movements. With the European Central Bank lowering the interest rate and charging for currency deposits, traders are probably reducing their expectations of the euro currency. Having said so, the single currency remains strong as it recovered towards the end of the week. A likely beneficiary of this is also the Aussie dollar as the increased interest rate difference between the two currencies will probably send more traders to the Australian dollar.
Having said so we must remember the the RBA may not favor an over valued currency and hence we must be prepared for any unexpected dovish moves.
The US Non-Farm Payroll came in somewhat within expectations. The unemployment rate has also fallen a little to 6.3%. This will likely continue to spark positive sentiments for the US economy. Should this translate to a global risk taking stance, we may actually see a weaken US dollar as investors money flow out.
Next week brings many important events such as Australian unemployment and US Retail Sales. Do have your proper money management.
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