Good day forex traders and readers.
Welcome to the weekly EUR/USD forecast. This currency pair remains one of the most popular but also most volatile currency pair around.
In the previous EUR/USD forecast we noted that the currency pair was bullish for the week. I highlighted the possibility of a test of the bottom bollinger band and it was right on target. The middle bollinger band would be the immediate resistance for the week ahead and I was not ruling out any return of the bearish pressure.
Looking at the EUR/USD weekly chart above we note that the currency pair was indeed bearish for the previous week. Once again our forecast was right on target!
The bottom bollinger band will remain as our immediate support for now. Any breach will open up extended bearish targets like 1.34 / 1.32.
Any return of bullish pressure will likely see an uphill climb towards the resistance of 1.3680 which is the middle bollinger band.
The economic developments over the past week was somewhat unimpressive. US economic data such as retail sales were weaker than expected. Over in the euro zone, the easing actions by the European Central Bank continued to create a drag on the euro currency as factors like carry trade interest rate differentials weight in.
The Ukrainian crisis remains uncertain and hence we cannot omit the fact of sovereign risk aversion.
As US FOMC meets and releases comments this week, pay attention to the section on economic outlook. Of importance is also the usual critical reports like the German ZEW Economic Sentiment report due early week.
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