Good day forex traders and readers.
How was your trading for the week? I hope you made some money from forex trading.
In the previous EUR/USD forecast we noted that the currency pair tested the 1.2 support as expected. The technical situation was very dedicate. While 1.2 was likely a strong support, we note that the fundamental situation might be overbearing. It would be crucial to monitor the price action on the lower timeframe. The immediate target for a bearish continuation would be 1.18.
Looking at the EUR/USD weekly chart above we note that the currency pair tested the 1.18 bearish target as mentioned. Once again congratulations to the readers who took this call.
The EUR/USD has since recovered and is around the 1.1840 region. Any bearish momentum will need to tackle 1.18 before aiming for 1.16. From a technical point of view we note that the past two weeks had significant bullish pressure and hence we should be careful of increasing bullish pushback.
Any bullish correction will need to take down many resistances. Target remains at support turns resistance region of 1.20.
The US Non-Farm Payroll came out better than expected and the US unemployment rate dropped to 5.6%. While many traders felt that this should warrant a major US dollar climb, I often mentioned that we need to observe the underlying fundamentals. Indeed so there are some worrying factors observed in the recent employment data. Wages are not increasing and this suggests some headwinds for the US economy. A number of investors wonder if this will delay the US Federal Reserve interest rate hike.
Over in the euro zone, there are reports of officials questioning the need for quantitative easing. One reason given was that the current measures may need more time to work before a decision can be made.
Next week brings much important economic data including the US retail sales which is a crucial gauge of an economy’s health. Do ensure that proper money management is observed to avoid unexpected surprises.
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