Good day forex traders.
Welcome to another forecast of our favorite currency par, the EUR/USD.
In our previous outlook, we noted that the currency pair was once again testing the previous low. We mentioned that the bearish momentum was strong and as expected the dip returned. This support region was crucial as a breakdown of it would likely see continued bearish momentum to 1.24. We had to observe the price action for more clues.
Looking at the EUR/USD weekly chart above we note that the currency pair did indeed face a strong bearish pressure upon dipping below the region. It went on to test 1.24 as expected and managed to push beyond 1.24 for some time.
The push beyond 1.24 is something to note. It indicates underlying bearish pressure. Should this region fail, we are looking at 1.22 and potentially 1.2. This is bringing us back to the financial crisis era and we do have investors calling the current correction of the markets a mini crisis. Well the beauty of forex is we can ride the profit train up or down. Simply observe the price action! Just be mindful that as we approach closer to 1.2, the likely hood of a strong bullish correction will increase. Hence proper money management is a must.
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To the folks who always never fail to call us rubbish and lucky, lose the hate! After all we do not charge you for reading :p and once right maybe lucky but again and again since 2008? Hmmmm
The US Non-Farm Payroll came in lower than expected. While there were some knee jerk reactions, I think it is crucial to note that the hiring remains and the unemployment rate has fallen to 5.8%. This brings us to levels found during the year 2008. While a number of analysts argue that the US recovery cannot be sustained, the markets are highly sentimental in nature and the current views are of a positive one.
Over in the Euro Zone, the European Central Bank president mentioned that the ECB will not hesitate to deploy additional measures to shore up the economic situation for the euro area. Many investors will see this as an indication for a drop in value of the euro currency and hence the dip. As of now, it looks like the Euro Zone is still struggling and the markets are punishing the region.
Continue to observe the economic announcements and the resulting sentiments. Be on the side of the markets.
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