Good day forex traders and readers.
Welcome to our weekly EUR/USD review and I hope you are having a great weekend so far. I am having migraine now but hey that will not draw me away from the forex charts 🙂
In the previous EUR/USD forecast we noted that should the currency pair go on a bullish track, 1.34 might be tested as a resistance. Much economic data were due that week and it would be pivotal to the movement of the EUR/USD and hence close monitoring was needed.
Looking at the EUR/USD daily chart above we note that the currency pair did test the major resistance of 1.34. It had since eased slightly to the downside.
The currency pair has been in a bullish trend since July and the current level is the previous high in June. Hence this retest is crucial as a breach may signal further bullish momentum towards 1.3600. A look at the weekly chart of the EUR/USD in our EUR/USD long term forecast also indicated this resistance as crucial and hence do pay extra attention to it.
A bearish correction may see an immediate support of 1.3280 followed by 1.32.
We mentioned that it was critical to monitor the economic data released and indeed it was. As the week moved on, it was obvious that the Euro Zone was publishing positive economic developments and the market was pleased. Risk appetite increased, weakening the US dollar against most currencies.
In the US, unemployment claims increased slightly and brought some hesitation. A few US Federal Reserve officials also seemed to gave indication of support for quantitative easing tapering soon and I would urge all readers to stay updated in any related developments.
The good economic data from China also seemed to further increase the general level of optimism in the market.
Next week bring us a huge amount of economic data from both the US and Euro Zone. For example the US Federal budget, retail sales and Euro Zone / Germany ZEW economic sentiment report. Do ensure proper money management.