The 0.76 resistance is now within range for the bullish traders. It may be a region of test in the upcoming week. The upper bollinger band will likely be the new resistance turned support.

Technical Analysis

Looking at the EUR/USD weekly chart above we note that the currency pair is bullish for the week too. It tested the 1.12 resistance as expected and had since eased off.

In the upcoming week, continued bullish momentum may test 1.12 again before targeting the upper bollinger band. The middle bollinger band is a likely support for any bearish return.

Fundamental Analysis

Risk appetite increased for the week resulting in market gains across riskier assets. Traditional safe havens such as the US dollar weakened as a result.

The major unexpected rate cute by the European Central Bank probably set a medium to long term path of currency weakness for the euro. That is if fundamentals will prevail over sentiments. :p

In the meanwhile, this increased easing will probably infuse the market with positive sentiments.

We are seeing a similar stance for the Reserve Bank of Australia. Although the interest rate was left alone, an easing stance could be observed. This will likely float the economy with positive sentiments. It remains to be seen if fundamentals will take over. Usually an expectation of continued low interest rate will weaken a currency due to less demand.

The upcoming week is an important one. We are expecting policy meeting minutes from the Reserve Bank of Australia. This is likely to provide more insights into the Central Bank’s policies and upcoming plans. We are also expecting employment data.

Over in the US, the CPI data is scheduled to be release. The US Federal Reserve’s Federal Funds Rate release is due too. This comes with the FOMC meeting minutes.

Trade safely and do practice proper money management.