Good day forex traders.
Welcome to our weekly review of the popular EUR/USD currency pair.
In the previous EUR/USD forecast we noted that the markets were likely confused by the various signals coming from the US Federal Reserve. As this was regarding the pace of interest rate hikes, sentiments were hence very sensitive to the developments.
The US dollar weakened together with global equities and bonds.
Looking at the EUR/USD weekly chart above we noted that the currency pair was bullish for the week. It was a classic technical week as the currency pair ranged within the support and resistance levels of the lower bollinger band and 1.16. I love it when our technical analysis is spot on! Yay!
In the coming week, we may see the pivot of 1.16 in action. It is likely that without any significant development, the EUR/USD will remain within 1.14 to 1.18. Drop to the lower time frame to evaluate the price action and to obtain insights as to it’s direction.
While sentiment relief for the US economy came in the news of strong profits for 3 of the biggest US banks, it did not convert significantly to any demand for the US dollar.
Over in the euro zone, not all is well as Italy’s economy comes under pressure as a result of a new budget which increases spending despite economic weakness. Brexit remains a big uncertainty as no significant agreement is being made.
The US retail sales release is due early in the week and it will be an important statistic to look out for. Consumer spending is a major barometer of economic health.
The EU Economic Summit is due to happen later in the week and it is expected to touch on topics such as Brexit. We need to be prepared for any unexpected developments and hence proper money management is a must.