Good day forex traders and readers.
Welcome to another EUR/USD forecast and I hope you are all geared up for a new trading week!
In the previous EUR/USD forecast we noted that the currency pair spiked up and tested the resistance of 1.32. As the currency pair eased, we might see 1.3 as a support. The apparent reversal of stance by the US Federal Reserve chairman Ben Bernanke on quantitative easing tapering reduced apprehension and we noted increasing sentiments and risk appetite.
Looking at the EUR/USD daily chart above we note that the currency pair did find support at 1.3 The middle bollinger band did exert influence too as per mentioned in the previous EUR/USD review and I am of the opinion that it is likely to continue so.
Possible support may lie at 1.3060 / 1.3 . Should bullish pressure lift the currency pair, we may see the EUR/USD testing 1.32 / 1.3240.
It is apparent that the US Federal Reserve remains committed to ease the market uproar it caused when chairman Ben Bernanke suggested the possibility of quantitative easing tapering happening in the near future. Consistent statements by various officials and Mr Ben Bernanke himself points to the tapering happening only when economic conditions are much more optimal than the current situation. This intention to reverse the market sentiment seems to be working for now as we observe risk appetite returning.
The G-20 meeting addressed this recent market turmoil too as it noted that changes to monetary policies should be carefully considered and communicated. The group acknowledges on the need to continue focus on growth and employment. Europe remains clouded by recession and Germany came under fire as nations believe that the prioritization of the Euro Zone now should be growth over deficit cuts.
A number of important economic releases are due for both the US and Euro Zone next week and hence proper money management should be observed.
Refer to the weekly pivot data for the EUR/USD below for some possible indications of support and resistance.
R3 1.3713 R2 1.3459 R1 1.3263 PP 1.3009 S1 1.2813 S2 1.2559 S3 1.2363