Forex Guides

EUR/USD Forecast 23 February 15

Good day forex traders and readers.

Welcome to our EUR/USD weekly forecast. For our new readers, you will not find crystal ball predictions here but instead find technical and fundamental situations presented for your better understanding of the markets. This is crucial for long term success in forex trading.

In the previous EUR/USD forecast we noted that the currency pair had been bullish for the last few weeks but as predicted previously, the bearish momentum halted. The technical situation remained uncertain and close monitoring on the lower time frames was advised.


Technical Analysis

Looking at the EUR/USD daily chart above we note that the currency pair remained in a consolidation phrase throughout the week. This is rather expected as mentioned previously and hence I hope no one was caught by surprise.

While the long term trend remains bearish, the immediate support of 1.126 needs to be overcome first before any further dips. Immediate resistance can be seen near 1.15.

Do be cautious as the tightening range suggests a possible breakout. Do have your proper money management.

Fundamental Analysis

From a fundamental point of view, the current situation is rather apprehensive. While Greece managed to secure a 4 months extension to the current bailout package, it remains to be seen if the Euro Zone members will be satisfied with Greece’s revised conditions. Markets do not take kindly to political issues and hence we must observe closely. The same goes for the fragile Ukraine peace treaty. Any escalation will likely impact equities, commodities and currencies.

As far as the U.S. is concerned, the economic recovery has been satisfactory to most investors. The question now remains on when will interest rates be hiked. This will likely have significant impact on the U.S. Dollar. The US Federal Reserve chair Yellen is scheduled to testify next week and any unexpected developments may cause movement in the currency dynamics.

These factors may explain the current consolidation as investors adopt a wait and see approach.

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