Good day forex traders and readers.

Time flies and this is the last weekend of 2013. How was your forex trading performance for the year? I hope that it is green with pips 🙂

In the previous EUR/USD forecast we noted that the currency pair failed to conquer the resistance of 1.38. With the European Union receiving a downgrade from S&P , close monitoring was advised so as the effect of which and also of the tapering of quantitative easing could be determined.

Technical Analysis

Looking at the EUR/USD daily chart above we note that the currency pair was bullish for the week although I would not be so eager to jump on the train. As evident with the spikes, especially on the last trading day of the week, low volume and liquidity conditions persist.

I have plotted possible support and resistance levels on the chart above. Possible supports are 1.36 and 1.3680. The strong resistance of 1.38 lies above.

Fundamental Analysis

The US employment situation continues to improve as jobless claims were reported to have fallen more than expected. It was also reported that the IMF will raise its forecast for the US economy.

Over across the Atlantic, sentiments are positive too. The European Central Bank president mentioned that there seems to be no signs of the need for another interest rate cut for now and investors are hence optimistic towards the Euro Zone. As the year comes to an end, there is growing market talk that after a poor 2012 and 2013, the Euro Zone is well positioned to perform in 2014.

In view of the festive season, I urge all readers to be extremely careful as unexpected spikes may happen. Trade safely.

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EUR/USD Forecast December 30

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