Good day forex traders and readers.
Welcome to the weekly edition of the EUR/USD forecast. How did your trading fare for the week? I hope you made money!
In the previous EUR/USD forecast we noted that the currency pair had been making higher lows for the past year. While the EUR/USD was definitely bullish from a long term point of view, we must note that it appeared to be capped by 1.4. Continued bullish momentum if any was likely to target a test of the 1.4 strong resistance.
Looking at the EUR/USD weekly chart above we note that the currency pair was bearish for the week. It did not manage to sustain any bullish momentum and fell towards the 1.38 support.
It is now testing 1.38 and any bullish recovery will likely see 1.388 followed by 1.4. Do keep in mind that previous price action indicate possible bearish strength near 1.4.
Should the bearish momentum continue, we are looking at a possible 1.37 and an extended 1.35.
Euro economic data was somewhat mixed throughout the week. Similar to the factors affecting the Aussie dollar, the EUR/USD was affected mainly by the strong performance of the US economy and the Ukraine crisis. As the prospects for the US dollar looks better, the Ukraine crisis and the threat of an escalation is also driving risk aversion up across markets. We need to continue to pay close attention to the situation.
Next week bring us important euro zone economic releases, for example the German IFO Business Climate and more. Do have proper money management and be ready for unexpected developments.
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