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EUR/USD Forecast Update 14 Sep 20

In the previous EUR/USD forecast, we noted that the currency pair had retreated below 1.19. This reaction suggested that a strong push factor along 1.2 might exist. As a strong sentiment and technical region, 1.2 would likely garner much speculative downside interest.

EURUSD Forex Forecast

Technical Analysis

Looking at the EUR/USD weekly chart above, we observe a flat week for the currency pair. As per our previous forecast, a strong downside pressure is likely keeping the EUR/USD depressed. The doji candle for the week also suggests uncertainty with neither sides of the trade emerging dominant.

The bollinger bands remain highly stretched but we are seeing signs of a loosening phase. More consolidative pressure will likely flow from this technical situation.

1.19 will likely function as the immediate resistance while the strong sentiment and technical region of 1.18 awaits as a possible support.

Fundamental Analysis

All eyes were on the European Central Bank press conference as analysts awaited for any official comment on the recent Euro currency strength. While ECB president Lagarde acknowledged the development, no major policy changes were made in response. This might have contributed to the lack of direction for the currency pair as speculations were rendered invalid.

The latest Brexit negotiations ended without any agreement. It is important to follow this development as investors are sensitive to geo political developments. The possibility of any significant impact on the economy and currency may lead to unexpected volatility as market participants react.

Our premium members received the latest retail forex sentiments analysis last Monday. It suggested that sentiments were little changed at that moment. This did tie in to the fact that there were no significant developments for both sides of the Atlantic. The flat ending of the week suggested again of the merits of a multi-faceted approach to forex trading. Leveraging on analysis such as correlation of assets or trader sentiments can often provide useful insights. Premium members should log in regularly for the various analysis provided.

In the upcoming week, we are expecting the US Federal Funds Rate and FOMC Statement events. Monetary policy statements are given much attention by analysts and investors as it has an impact on the economy. The minutes will be analysed thoroughly for insights on the economic policy ahead. Significant volatility may be generated if there are unexpected revelations. Investors and analysts will likely be watching for any policy action in response to the COVID-19 pandemic.

The Bottom Line

It is imperative that we continue to monitor the global and region developments of the various ongoing challenges. The COVID-19 crisis continues and the stand off between the US and China continues to remain a possible source of volatility, especially when a number of the major points are economic in nature. Brexit negotiation developments should be monitored too. These fluid situations have the potential to send the EUR/USD either way.

It is important to follow an economic calendar as your forex trading plans may be impacted due to shifting sentiments. Members do log in to your dashboards for the economic calendar. You should also review the latest Major Currency Pairs, USD Index, Gold, Brent Oil analysis to complement your forex trading plan.

Traders should always practice proper money management and seek to understand the underlying tones for the market. May the pips be with you!

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