Good day forex traders and readers.
It is a new forex trading weekend and I hope that you will find success and earn some pips!
In the previous EUR/USD forecast we noted that as we approached the parity level, bullish support might become stronger. We need to be careful of any unexpected developments.
Looking at the EUR/USD weekly chart above we note that the currency pair was bullish in the previous week as expected. There was an unexpected spike targeting 1.1 and the currency pair had since eased off.
1.1 will likely be a bullish target and if it is achieved, we may be looking at an extended target of 1.12. As far as bearish targets are concerned, the EUR/USD will need to overcome parity first.
While nothing much has changed fundamentally, I often warned of the sentimental nature of the markets and how it might affect our forex trading. This is especially true if you are on a leveraged position as gains and unfortunately losses are amplified.
The sharp spike on the EUR/USD last week was probably due to the dovish statement by the US Federal Reserve chair. She indicated that there was no rush for an interest rate hike. Sentiments were affected and the currency pair had a kneel jerk reaction. A few of my readers were unfortunately heavily stacked on a sell position and suffered a margin call.
While the EUR/USD weekly chart above suggests a long term bearish trend, there is always the possibility of short term bullish runs. Always practice proper money management.
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