Good day forex traders.
Welcome to another EUR/USD forecast by The Forex Koala! I am not getting younger and nowadays i spend time looking back at the various stages of my life.. earlier days are getting a little fuzzy. However i do remember my margin calls clearly. OUCH.
In the previous EURUSD forecast we noted that the EUR/USD bearish momentum was strong and it might slide down to touch 1.245 / 1.24. The Euro Zone budget deficit was like a broken old record and getting on everyone nerves. Get over it already!
Looking at the EUR/USD daily chart above, we did see a test of 1.24. I love it when my charts work! Phew ~ LOL
SMA 20 = Flat
SMA 50 = Bearish
In a clear view of the difference in currency pairs, the AUD/USD as reviewed earlier is having a bullish SMA 20 but our resident EUR/USD only barely managed a flat. The current region of price action consists of various resistances and a forex gap region. A consolidation may occur but that will depend highly on fundamental developments too.
I mentioned that the European Union summit would be pivotal as the global markets dread the overdue inaction of the Euro Zone budget deficit crisis. Investors love to see solutions and definitely care nothing about the differences in political direction.
An agreement to enable funds to aid trouble banks was reached towards the end of the week. Furthermore the funds will be able to buy the bonds of countries in trouble, easing their burden of high interest rates bonds. This is like a bail out without the turmoil and restrictions imposed that comes with a formal bail out. ( Greece / Ireland must be fuming mad! )
Now the markets definitely liked that as equities and high yielding currencies soared. Risk aversion was no where to be seen as risk taking activities ended the trading week. I hope no “reconsideration” will surface as this will be akin to having a bucket of cold water splashed onto those risk taking revelers!
What about the US? We head into the 4th of July week and hence we may see light activities. Regardless, the high risk US Non-Farm Payroll is due this coming Friday and hence caution is advised. Recently news is not as kind as before to the US.
Check your trade positions and risk exposure. Done that? Check again!
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