Good day forex traders and readers.
How is your weekend so far? I hope you had a wonderful week of trading. Let us be prepared for a new week of trading and aim for those harvests of pips.
In the previous EUR/USD forecast we noted that the currency pair tested the support of 1.3280. If bullish pressure came, the resistance of 1.3400 would be a prime target. Recent fundamentals were indicating improving sentiments.
Looking at the EUR/USD daily chart above we note that a strong bullish momentum had arrived. The bullish target was taken without much resistance and the currency pair had since tested another strong resistance of 1.3480. I expect that any continued bullish pressure needs to tackle the resistance of 1.3480 first before moving on to 1.3600. Should there be a bearish return, first bearish target will probably be the previous channel region of 1.3280 – 1.3380. How the EUR/USD moves on the first day of trading will probably be a key indication.
The improving sentiment towards the US and Euro Zone continues along this week and this is evident in the various equities markets.
The European Central Bank ECB announced that banks have decided to repay more than forecast of the 3 years loans and this brought about the belief of much improved conditions among the financial markets. Confidence in Germany was also reported to be the highest in 2.5 years. Loan yields are easing too as investors demand less for risk taken.
The US government has voted to temporary suspend the debt ceiling limit and this brought about some relief as fears of a crunch of the US government eases. Many believe that the employment market has improved further and hence the upcoming US Non-Farm Payroll will be an event to monitor closely as any unexpected deterioration of the employment market will probably cause the current stance of the EUR/USD to be disrupted.