Good day forex traders.

i hope your weekend is turning out to be wonderful. The perfect time to catch up on your forex charts and analysis eh? 🙂

In the previous EUR/USD forecast we noted that the currency pair remained in a bullish channel. Spain was receiving increasing media scrutiny and there were speculations of an upcoming round of stimulus to be announced by the US Federal Reserve Chairman.

Technical Analysis

Looking at the EUR/USD chart above, the price action did remain bullish and in fact created a bullish spike to touch the resistance of 1.28.

SMA 20 ( RED ) = Bullish

SMA 50 ( BLUE ) = Bullish

Both SMAs are bullish now due to the recent moves and this may suggest possible continued bullish momentum. A word of caution is that the SMA 200 is now at the current price action. It is usually an indicator of possible long term momentum and also often functions as an immediate support and resistance line. Combined with the resistance of 1.28, close attention should be given to this region.

Fundamental Analysis

The market are generally satisfied with the recent developments.

The pro stimulus session at Jackson Hole brought back risk appetite and high yielding assets gained in value due to demand. Furthermore with the ECB announcement of a bond buying program to stabilise the interest costs of debt refinancing, investors are relieved that actions are taken to combat the Euro Zone budget deficit crisis. While the US NFP turned out to be not as positive as expected, unemployment rate unexpectedly dropped. Bringing it down to 8.1%.

In a report released late week, it was revealed that German industrial output was higher than expected in July. This brought about positive sentiments as it suggested that the largest economy in the Euro Zone is resisting the effect of the crisis. Having said so recent dips in growth suggests that the crisis may be catching up.

Over in the far east, China’s president mentioned that the country is facing notable downward pressure due to the global economic conditions. I mentioned often that China is a global growth driver and with such developments, there may be a risk of a spiral back to global recession. The situation here must be monitored closely.

Trade safely.

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EUR/USD Forecast 10 September 12

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