Good day forex traders.
Welcome to our weekly review of the popular currency pair.
In the previous EUR/USD forecast we noted that the currency pair was still ranging between the support and resistance zone of 1.16 to 1.18. The market remains uncertain as the trade war between the US and China showed no signs of stopping.
Looking at the EUR/USD weekly chart above we note that the currency pair tested the support of 1.16 and had eased up since. Ever since we started coverage of the EUR/USD since 2008, support and resistance regions have been observed to be an effective guide on possible price action.
For the upcoming week we would be looking closely at the 1.18 and 1.16 levels. A forex squeeze may be possible if the market developments support it. ( such as an unexpected event )
The US President had commented that he is ready to extend tariffs to all $500 billion of the import from China. He was also reported to have criticised the US Federal Reserve for rising interest rates. This may take off some pressure on the strengthening US dollar if the market believes that the US Federal Reserve may slow down the pace of interest hikes.
The trade war between the US and China remains a potential risk to currency positions on either sides depending on how it unfolds. Proper money management is definitely crucial.
We are also expecting the release of the European Central Bank main financing rate and many will be looking out for hints of the future of the quantitative easing program.