Good day forex traders and readers.
As we head into the second half of January, I hope that everyone is having a good time making money from forex. I know I am a nag but remember to always have proper money management!
In the previous EUR/USD forecast we noted that the currency pair remained in a tight trading range. It continued to be limited by the resistance of 1.368. Should the upside pressure manage to breach the resistance, the extended bullish target would probably be 1.38. However if the bears return, we could expect possible immediate support at 1.36 followed by 1.35 – 1.352.
Looking at the EUR/USD daily chart above we note that the currency pair did face support at 1.3520. It had since retreated. I love it when my chart works 😉
The bearish push was strong and hence I feel that we should monitor 1.35 – 1.352 closely. Should the support fail, the currency pair will move further from the pivotal strong support / resistance of 1.36 and hence an extended bearish target may be 1.34.
Any bullish return will likely see the EUR/USD testing the resistance of 1.3680 again.
From a fundamental point of view, things were pretty much flat with regards to the euro zone. There was nothing specifically important enough to cause a major impact on sentiments. Nonetheless as we can see, the euro currency gave up much value versus the US dollar, slipping under the strong support of 1.36. Hence it is likely a situation of dollar strength.
Long time readers will know that my opinion is that the European Central Bank and Euro Zone had taken the pain and made fundamental corrections to the finance of the region. With countries like Ireland graduating from bailout status, we can look forward to more positivity from the region if nothing adverse happens. Having said so, we are all but just pawns to the forces of the market and hence in the meanwhile, we need to monitor the trend and not go against it.
Next week bring us crucial economic data such as the German ZEW Economic Sentiment. Let us observe if any of which will swing the demand to the euro currency.
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