Good day forex traders.
Welcome to another review of the EUR/USD. I hope everyone made money in forex and no one suffered a margin call. Long time readers will know that i had 3 last time and ouch it hurts!
In the previous EUR/USD forecast we noted a possible technical triangle squeeze. The Euro Zone remained fragile as countries continued to sort out their debts and budgets. Germany might be open to ease conditions for Greece but the uncertainty remained.
Looking at the EUR/USD daily chart above, the currency pair did have a breakout due to the technical triangle squeeze as mentioned. Furthermore it almost touched the extended bullish target of 1.26 that i was commenting on. That is a double goal for us koalas ! 🙂
SMA 20 ( RED ) = Bullish
SMA 50 ( BLUE ) = Flat
The SMAs are not aligned in direction now and it is time to evaluation the direction of the currency pair. If there is a bearish correction, we may be looking at the bottom of the bullish channel which will be right below the double support of 1.24 / 1.245. Any bullish momentum will no doubt need to tackle the resistance of 1.26. After which a bearish trend line will be the next resistance. ( Top right of the chart ) This will probably be around 1.27.
This week saw a slip over at the Euro Zone due to Greece’s Prime Minister bid to obtain a 2 years ease on government cuts. As Greece faces intense speculations of an exit from the Euro Zone, such developments would probably fan further doubts. Having said so towards the end of the week, the meeting between the German Chancellor and Greek Prime Minister was largely seen to be positive as Angela Merkel was reported to be saying that the German government will stand behind Greece and she wants Greece to remain in the Euro Zone. Having said so, no concrete actions are planned and this may disappoint.
Speculations of the US Federal Reserve implementing additional quantitative easing are reported to be increasing as the US economy shows little sign of pickup. Mr Bernanke is scheduled to speak at the Kansas City Federal Reserve’s economic-policy conference at Jackson Hole on August 31 and many are speculating on possible details.
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