Good day readers.
How was your week of forex trading? I hope you made money from your trades.
In the previous EUR/USD forecast we noted that the currency pair attempted a bullish maneuver. It was however capped by 1.11 as forecasted. From a longer term view of analysis, the EUR/USD remained in a consolidation phase. We should monitor the upper limits of 1.12 and the extended bullish target of 1.14.
Looking at the EUR/USD weekly chart above we note that the currency pair was bullish for the week and as expected testing the 1.14 bullish region. This is a crucial resistance.
From a technical point of view, there is nothing to suggest an end of the long term bearish momentum. Having said so should the 1.14 resistance fail, we may be looking at the opening of the upper region of up to 1.22. In the meanwhile we may see 1.18 as the medium term bullish target. Do be mindful however that the upper bollinger band which is in the vicinity may function as an immediate resistance too.
Based on recent price action, any bearish return will likely see 1.12 followed by 1.11.
The FOMC meeting minutes brought about much dampened sentiments for the U.S. Dollar. As traders will often analyze the minutes for indications of upcoming policy actions, there is often an impact to the markets. The meeting minutes revealed concerns regarding the lagging inflation and the impact of a strong U.S. Dollar on the U.S. economy performance. The recent Chinese correction is also a cause for concern due to the risk of contagion.
Regulars readers will know that as I mentioned previously, the anticipation of an US interest rate is fueling demand for the U.S. Dollar. Therefore with sentiments dampened as stated above, it is not surprising that the EUR/USD was bullish for the week.
We need to continue to monitor developments that have an impact to sentiments as often short term moves are sentimental in nature.
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