Good day forex traders.
Welcome to our review of the popular EUR/USD currency pair.
In the previous EUR/USD forecast we noted that it was testing the middle bollinger band. A break above might indicate a bullish recovery and the medium term target would be 1.18. We also noted that the ECB intends to trim its monthly bond purchases which was started as part of the relief post 2008. Investors were likely attracted to the euro zone by this outlook.
Looking at the EUR/USD chart above, we observed that it has ended the week above the middle bollinger band. Our target of 1.18 was achieved too!
While this is definitely indicative of bullish pressure, it remains unknown if the currency pair will turn back south towards the pivot of 1.16. Beyond 1.18, the upper bollinger band may be the next resistance at 1.19.
Investors were relieved when the tariffs imposed by US and China on each other’s goods were not as harsh as expected. Risk appetite increased and riskier assets such as equities and the euro currency benefitted.
Having said so, not all is well as the Brexit woes continue to plague the markets. A deal has not been reached and investors are apprehensive as a result of it.
The US Federal Reserve is expected by many to be hiking the US interest rate in the coming week. While the market has likely priced in this event, the more hawkish stance adopted by the European Central Bank may further prompt an increased demand for the euro currency.
Besides the US Federal Reserve event, the ECB president is also due to speak early Monday. Do trade safely and practice proper money management.