Good day forex traders.
Welcome to our weekly review of the popular EUR/USD.
Are you ready for the week ahead? Do always remember to practice proper money management.
In the previous EUR/USD forecast we noted that the possibility of a pivot was there. 1.16 is usually a strong support and resistance region and hence the price action might be attracted to it.
Looking at the weekly EUR/USD chart above, it does seem indeed that the region of 1.16 is shaping up to be a pivot. It ended the week before below 1.16 and for the week just passed, it ended above 1.16.
A number of technical analysts maintain the view that a head and shoulders pattern is still a possibility. If indeed, we may see the currency pair head south towards the lows of 1.06.
The EUR/USD is currently testing the middle bollinger band. Should it manage to break above, the currency pair may be experiencing a bullish recovery and our medium term target will be 1.18.
In the recent European Central Bank meeting, it was noted that the ECB intends to trim its monthly bond purchases which was started as part of the quantitative easing measure post 2008. Investors saw this as a nod to the improving euro zone economy. Having said so, the ECB also mentioned that policy will be maintained as such for now, dampening hopes of an interest rate hike before second half 2019.
The upcoming week brings with it more than one event where the ECB President is expected to speak. Investors may react to any unexpected comment and hence we must practice proper money management.