Good day forex traders.
It is a good weekend and how are you spending it? Analyzing forex charts perhaps?
In the previous EUR/USD forecast we noted that the currency pair was bearish for the week and it remained in a consolidating phase as expected. It was testing the support region of 1.12. The EUR/USD was at the middle bollinger band and hence it was a possible center of pivot. The bands had stabilised and it was indicative of a consolidation phase.
Looking at the EUR/USD daily chart above we note that the currency pair was bullish for the week. Having said so it is back at a previous region and hence indeed it is consolidating.
The currency pair is now near the resistance of 1.14. It is interesting to note that the bollinger band is narrowing. This suggests a possibility of a breakout. Should a bullish recovery return, we may see an eventual 1.24. A bearish momentum will probably aim for a downside target of 1.1.
While the fundamentals remain unchanged, sentiments are ever shifting. The talk of the market now is the anticipation of a possible interest rate hike by the US Federal Reserve this coming week. This is an important development as should it happen, it marks the divergence of the phases of monetary policies for the US Federal Reserve and European Central Bank. The tightening of the U.S. monetary policy will likely increase demand for the U.S. Dollar while the continued easing of the Euro Zone monetary policy may dampen demand.
Besides the FOMC meeting, we also have critical economic releases such as the U.S. retail sales and German ZEW Economic Sentiment. Do monitor the resultant sentiments and adjust where necessary.
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