Good day forex traders.
How was your last trading week? I hope everyone made money from forex. Nothing beats finishing the week in green! Mine was just a slight green though cause i had a bad trade 😛
In the previous EURUSD forecast we noted that the SMA 20 was turning bearish due to the sharp dip. This might suggest an extended target of 1.2. The ECB’s move to cut interest rate further affected the currency pair and sentiments towards the Euro Zone. US’s worst than expected NFP also caused a dent in sentiments.
Looking at the EUR/USD chart above, as expected due to the sentiments at the start of the week, the currency pair did drift lower and tested 1.22. I LOVE IT WHEN MY ANALYSIS WORKS ! ha 😛
SMA 20 = Bearish
SMA 50 = Bearish
The EUR/USD is now at the 1.22 region. If this support fails, we can be on a lookout for 1.2. Both SMAs are bearish now and hence we can have a bearish possibility if nothing major changes the sentiments. We last visited this region 2010 June.
From a fundamental point of view, nothing much has changed. The Euro Zone continues to suffer from the budget deficit crisis. Solutions are slow to come by due to the various opinions and differences. This is a key disadvantage of a 17 nation monetary union.
China printed a 7.6% growth in GDP late week and this probably caused the EUR/USD to recover a little. I always mentioned that in recent times, China has become sort of a beacon of light in financial darkness. Many investors look towards China as a driver of global economic progress. When China is doing well, we can expect the sentiments to glow with positivity. Likewise for the opposite!
A good point to note here will be the comparsion of the AUD/USD and the EUR/USD. With the same China development, the Australian dollar virtually erased it’s losses for the week. On the other hand, the Euro currency only managed to recover some of it’s losses. This suggests that the markets’ sentiment towards the Euro Zone remain depressed.
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