Forex Guides

EUR/USD Forecast 1 Sep

Good day forex traders and readers.

Welcome to our weekly forecast of the most popular currency pair EUR/USD. How was your forex trading? Hope you made money. 🙂

In the previous EUR/USD forecast we noted that the currency pair had distanced itself from the 1.34 region. The bidders of the 1.32 region seemed to have weaken as the EUR/USD approached 1.32.

We noted the possibility that technical traders might want to bring upon a test of 1.32. This region is usually a strong support and resistance line.


Technical Analysis

Looking at the EUR/USD weekly chart above we note that the currency pair has dipped further. It is now beyond the 1.32 support line and hence there is probably a bearish bias.

The bollinger bands are also suggesting a bearish technical pressure with its downwards gradient.

The next probable bearish target is 1.3. We may see a strong bullish resistance against any dips due to the technical importance of 1.3

Fundamental Analysis

The euro zone continues to face economic challenges. The region is in danger of contracting into a recession. Germany which is the largest economy for the euro area is not performing while the France the second largest is on a standstill. Unemployment rates remains critical as most of the euro zone countries still report a double digit percentage. The Ukraine and Russia conflict also adds a dampening pressure to the region. Investors do not like sovereign uncertainty. Furthermore with the Russian sanctions, economies of several euro zone countries like Germany will likely be impacted due to their trading relationship.

In the meanwhile, the US seems to be on the right track with it’s dipping unemployment rate and rallying equities. Growth figures are looking good too. This situation probably creates a pull factor for investors against the euro zone.

Next week continues to present to us important economic data including the US Non-Farm Payroll. Do monitor closely.

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