Good day readers.
The recent consolidating nature of the EUR/USD has proved challenging for most traders. I hope everyone is doing well.
In the previous EUR/USD forecast we noted that the currency pair was bearish for the week. It had attempted to stretch below the support of 1.12 but had since settled around it as expected. The middle bollinger band had once again proved to be of use to our indications of price action. A clear breach of the 1.12 support / middle bollinger was needed before we could expect an attempt of the bearish target at 1.1. A bullish recovery would likely target 1.14
Looking at the EUR/USD weekly chart above we note that the currency pair was a doji for the week. It remained around the the middle bollinger band as expected.
Besides the middle bollinger band, I mentioned that the region of 1.12 is a strong support and resistance level. It is crucial to note that the EUR/USD is tightening it’s range. We need to be careful of any unexpected spike.
Immediate bullish target remains at 1.13 followed by 1.14. Any bearish dip must breach 1.12 first followed by 1.1.
The US Non-Farm Payroll came in weaker than expected and it probably dampened demands for the US dollar. Employment remains one of the most indicator of an economy. Investors often also view the US Non-Farm Payroll as a preview of the feasibility of the US Federal Reserve to hike interest rate.
In an interesting report on the unification of East and West Germany and how it took time to get over the initial issues, a reference to the euro zone was made. As I mentioned before, the integration of numerous economies with vastly different state of performance will be challenging. We can see this with Greece and a few other countries. This can only be solved with close collaboration and time.
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