Good day forex traders.
Welcome to another weekly forecast review of the EUR/USD. Of late, this currency pair is serving up cranky spikes based on sentimental reaction. Dangerous situation it is.
In the previous EUR/USD forecast, we noted that the SMAs were no longer aligned and hence we might expect a consolidation of sorts. Hawkish comments by the ECB gave rise to a bullish spike but the sentimental nature of it might not sustainable.
Looking at the EUR/USD chart above, we noted that the SMA 50 did turn out to be an immediate resistance as mentioned in the previous EUR/USD weekly forecast. 🙂
SMA 20 = Flat
SMA 50 = Flat
As i mentioned in previous EUR/USD forecast, the currency pair might be consolidating for now and indeed it was so. ( Although the range was big due to the highly sentimental nature ) Any continued bullish correction must push pass the SMA 50 and double resistance region of 1.24 / 1.245. Should the currency pair decide to drop it’s weight, I expect 1.2330 followed by strong support of 1.2200.
They came they saw they conquered they left. This basically describes how these sentimental spikes work. In the previous review we noted that Draghi of the ECB said that whatever would be done to preserve the 17 nation currency. This week however nothing concrete was done and it was reported that the German bank had reservations. The bulls simply packed up their bags and skipped town, leaving many long positions cut in view of massive losses.
Towards the end of the week, hawkish comments started to reappear from members of the ECB. This was followed by the US Non-Farm Payroll which was better than expected. Once again the bulls came back and many followed suit. The caution here is did anyone noticed that unemployment rate went up to 8.3%?
The Euro Zone is a troubled region and the US remains fragile. Hence sentiments will rule most moves due to latest “updates”. I strongly advice proper money management if you want to attempt to harvest from this currency pair.
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