Good day forex traders and readers.
Welcome to another EUR/USD forecast! It is almost mid week and I hope you are off to a great start.
In the weekly EUR/USD forecast we noted that the head and shoulders pattern did fulfill. As the 1.28 region can be an area of consolidation, we need to monitor closely for further developments.
Looking at the EUR/USD 4 hourly chart above we note that the currency pair had been recovering since the start of the week. However during the last few hours we can observe some bearish pressure emerging again. If this continues, I expect immediate support to be around 1.2820, extending down to 1.28. Upper resistance will likely be the top of the bollinger bands.
We continue to see weakness in the commodities and this suggests that the fundamental situation remains. Regardless, there are speculations that the markets are waiting to observe if the US Federal Reserve Chairman Ben Bernanke will give more insight to his stance on the quantitative easing QE policy when he speaks tomorrow on the economic outlook and monetary policy before the joint economic committee. Hence do be careful of unexpected shifts in expectations.