Good day forex traders.
How is your weekend so far? I hope everybody made money trading this week. Just do remember that forex is not a get rich overnight scheme and hence patience is a must!
In the previous EUR/USD forecast we noted that the 1.28 might be a strong support. The SMA 200 was in the region and might add to the support strength. From a fundamental point of view, economic developments were worrying due to indications of slowdowns.
Looking at the daily EUR/USD chart above, we note that the currency pair failed to breech 1.28. As i mentioned during the previous forecast, this is a strong support and the SMA 200 is in the region and hence might act as a double support. I love it when my technical analysis works 🙂
SMA 20 ( RED ) = Bullish
SMA 50 ( BLUE ) = Bullish
Both SMAs are still bullish and this indicates that the bullish trend may be in existence. A clue will be to see how the price action reacts at 1.3 when the market opens for the new trading week. Bullish target will be 1.32 while a bearish correction will probably target the strong support of 1.28 again.
The US Non-Farm Payroll brought about an interesting situation. While the number of new jobs created was more or less as per predicted, the unemployment rate unexpectedly dropped to 7.8% !! Now there you may be wondering that this is excellent and we should see extreme risk taking activities?
So where is it?
This is the not so obvious section of the statistics. For those familiar with the details, a big contribution to this reduced unemployment rate is courtesy of part time jobs. Yes! Hence once the tenure is over, unemployment will say hello again. Hence as i always mentioned, it is crucial to always go deep into the details 🙂
Over in the Euro Zone, the ECB mentioned that the ball is in Spain’s court now. Whether if assistance will be provide will be Spain’s decision. As of now, the Spanish government remains resistant to the conditions given. This issue is probably creating a drag on the EUR/USD.
Next week brings a number of important meetings such as the Eurogroup meetings ( discussions of policy coordinations etc ) and the G7 ( discussion of economic issues etc ). Be careful of any unexpected developments causing a shift in expectations.