Good day forex traders and readers.
Welcome to the weekly forecast of the EUR/USD currency pair. How have you been trading? I hope you have been making money trading the EUR/USD!
In the previous EUR/USD forecast we noted that the currency pair stayed below the 1.38 resistance level. There seemed to be an immediate support at the 1.3720 level. Any further bearish momentum would likely see supportive action around 1.36, 1.365, 1.368.
Looking at the EUR/USD daily chart above we note that the currency pair tried to overcome the resistance of 1.38 but it failed midweek and started a bearish drop. It is now testing the support region of 1.365 / 1.368.
Should the bearish momentum continue to pick up and overcome 1.368, we may be looking at a test of 1.36 and 1.3520.
Any bullish recovery will need to take down 1.3750 and 1.38. An extended bullish target may be 1.3850.
The US Non-Farm Payroll turned out to be weaker than expected and while many were expecting an adverse reaction, the markets seemed to have taken it well. This is probably due to the fact that the figures themselves remained strong and hence indicative of an US economy that is continuing with its growth. We may see an increased take up of the US dollar from a short term point of view.
Another important factor that I mentioned previously is that the European Central Bank had mentioned a few times on the importance of an euro currency that is of a right price which does not affect the export driven economy of the euro area. Hence this is something we need to always consider in our trading plans.
Continue to monitor economic releases next week and watch out for any unexpected developments.
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