Good day forex traders.
Hope you had a good week trading the EUR/USD. While this currency pair is one of the most popular, i believe it is also one of the most unpredictable ones 🙁
In the previous EUR/USD forecast we noted an immediate support right below the price action. Any bullish momentum needs to overcome the double support of 1.24 too. China faces a slowdown on their hands and worldwide sentiments may be threatened.
Looking at the EUR/USD chart above, the support trend line is still in play and i am observing a triangle squeeze setup with the bearish resistance line from the highs of 1.26+.
SMA 20 = Bullish
SMA 50 = Bearish
Conflicting SMAs usually indicates a currency pair without sustained direction and hence uncertainty is high. Should the triangle squeeze setup do play out, a bullish breakout will need to take down the double resistance region of 1.24 and the extended target is 1.26. A bearish breakout will need to overcome 1.22 first.
This week brought us some improvement in sentiments as leading indicators suggest that the economy is recovering. After a slowdown in China was reported, the Chinese officials were optimistic about taking actions to rectify the Chinese economy. While this did not cause a major upside boast to sentiments, the EUR/USD held on to its minor gains for the week.
Greece faces a report next month on the progress of it’s fulfillment of it’s bailout terms. It was reported that Greece wants to extend the time given by another two years. While it was commented that German’s Merkel is open to easing conditions, opposition from her government may complicate matters.
Readers, the Euro Zone budget deficit crisis is still very much a threat and hence i am doubtful that positive sentiments will be for the long term.