Good morning forex traders and readers.
Welcome to another EUR/USD weekly forecast. I hope you had a good time with your family. In the meanwhile I hope you a great trading week too. A bag of pips harvested would be excellent!
In the previous EUR/USD forecast, we noted that the currency pair was making higher lows and hence a bullish momentum may be forming. The US Non-Farm Payroll also brought about positive sentiments. Nonetheless caution was advised as a squeezing range was noted later in the week.
Looking at the EUR/USD daily chart above we note that the currency pair was bullish until late week when a overwhelming bearish pressure took over. This is hence why we must always practice proper money management. Forex is never 100% predictable.
As the EUR/USD dip below 1.3 , it has a slight makings of a double top and if indeed so, we may see 1.28. Continue to monitor closely and be careful not to catch a falling knife.
The rate cut by the European Central Bank ECB suggests a challenge to the euro zone economy and hence sentiments are affected. Likewise with recent interest rate cuts by Australia and various Asian countries, there are speculations that the difficult economic conditions are spreading. It seems to me of a transference from the US back in 2008 to the Euro Zone and perhaps soon to come the Asian region. HA. I am going out on a limb here probably but you’ll never know.
With the general sentiment that the US is economically progressing with its monetary measures and all, it is interesting as we observe to see if risk aversion has step down for confidence as a means reason for holding US dollar.