Good day forex traders.
Welcome to our weekly review of the EUR/USD. It is a popular currency pair that often enjoys a high level of liquidity. ( one reason why the spreads are low for bids )
In the previous EUR/USD forecast we noted that the currency pair might experience a technical squeeze and should it happen, the head and shoulders technical pattern on the weekly chart might unfold.
Looking at the weekly chart of the EUR/USD we are spot on! To the forex koalas who wrote in to share your joy, I feel you! Nothing beats the joy of seeing the chart unfold as per what you expected!
As we await for the momentum to show its next step, a crucial point will be 1.14. The longer the currency pair remains south of it, the more likely for sentiments to build up and push it down. If indeed so, 1.12 will come into consideration.
I was reading a commentary and I thought I’ll made some comments here as I could see where it may be heading to. We all know that the US Federal Reserve had already started hiking interest rates which gives an uplifting effect for the US dollar. Having said so, we know that the interest rates will affect other segments of the economy such as housing. It was reported that housing figures are dropping as the mortgage costs are climbing. This may inevitably affect other economic activities downstream such as construction or retail.
US retail sales and building permits data will be released this week. It will be a good time to have a pulse check on the economy.