Good day forex traders and readers.
Welcome to another edition of our weekly forex forecast. I hope you had a great week trading and making pips!
In the previous AUD/USD forecast we noted that a continuation of the bullish momentum would be a successful breach of the 0.9140 resistance region. An extended bullish target region would be 0.93. However the 0.9140 resistance region is rather strong and should it hold, we might see a test of the support 0.9 followed by 0.8880.
In the previous EUR/USD forecast we noted that if the bullish momentum continued it would be exciting as the next extended bullish target would probably be 1.4. If there were no extraordinary influences, I would expect some resistance towards it.
Looking at the AUD/USD daily chart above we note that the currency pair did not manage to breach the resistance of 0.9140. As expected, it is now testing the support of 0.9.
Should the support fail, we may be looking at 0.8880. Any bullish momentum will definitely need to overcome 0.9140 first before targeting the extended bullish target of 0.93.
Looking at the EUR/USD daily chart above we note that the currency pair has failed in it’s attempt to test the critical resistance of 1.4. It is now back at the 1.3900 region. As expected, there was strong downwards pressure.
1.4 remains a critical resistance while the immediate support is 1.38.
The Australian economy continues to face challenges as recent Chinese economic developments are seen to be underwhelming. As an export driven economy, Australia is often affected by the trade flows of it’s trading partners.
The employment figures for Australia was better than expected, probably easing off some bearish pressure.
With regards to the euro currency, the European Central Bank is of am opinion that excessive strength may affect price stability and hence investors interpreted this with a sell off. As we are well aware of the dovish stance of the ECB towards bullish runs, we must factor this in our trading strategies.
With the Crimea referendum, we need to exercise caution. Any unexpected developments may even result in a forex gap.
Next week also brings us many important economic events such as the US Federal Funds Rate, German ZEW sentiments, Australian Monetary Meeting Minutes Report and more.
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