Good day forex traders.
How was your trading week? Hope you made lots of pips! 🙂
In the previous EUR/USD forecast we noted that a head and shoulders technical pattern may be forming. The US Federal Reserve hiked interest rate and investors are looking towards the direction of the European Central Bank. The next major support lies at 1.16.
Looking at the EUR/USD weekly chart above, we note that the currency pair is now testing the support of 1.16 as expected. It feels great when our analysis turns out like clockwork doesn’t it? 😉
Should the support hold, we may see some consolidation as the market searches it’s bearings. If the support fails, we may see a dip towards the 1.05 region as a fulfilment of the head and shoulders technical pattern. Prior to that, an immediate support may present itself at 1.12.
The European Central Bank president commented that there are plans for the assets buying stimulative measures taken during the previous financial crisis to be withdrawn in totality after the end of the year. Having said so, the European Central Bank commented that it will hold the interest rate for now, triggering disappointment among investors who are counting on a hawkish euro currency stance. The euro currency has since weaken compared to the US currency.
We are due for a number of appearances by the European Central Bank President. Do be on a lookout for unexpected developments. Proper money management is crucial when trading.