Good day forex traders.
Welcome to the weekly review of the popular currency pair known as the EUR/USD. We have been covering it for a decade now and it still never fails to excite us. 😉
In the previous EUR/USD forecast we noted that the currency pair remained range bound. Having said so, we were not writing off the possibility of a technical squeeze. From a fundamental point of view, the US economy continued to show robust figures.
Looking at the EUR/USD weekly chart above, we note that the currency pair is below 1.16. This is significant as the longer it remains under, the more likely bearish momentum will build up.
Should the EUR/USD head south, the 1.12 region will be the long-term target. If we were to consider the possibility of the head and shoulders playing out in full, the ultimate destination may be the lows of 1.04.
The US Non-Farm Payroll was weaker than expected. 157,000 jobs was added in July but it is lower than the estimated 190,000.
The US unemployment rate fell from 4.0% to 3.9% and probably fueled sentiments of positivity.
A number of analysts are reported to be of the idea that this signals a continuation of the US Federal Reserve plan to hike interest rates. This may drive up the value of the US dollar as investors usually look favorably upon higher interest rates.
We are seeing no end to the US and China trade war at the moment. It is important that we continue to practice proper money management. Investors are often adverse to political complications and momentum may swing hard when unexpected developments occur. Do trade safely.