Good day forex traders and readers.
Welcome to our weekly forecast of the EUR/USD currency pair.
In the previous EUR/USD forecast we noted that the currency pair had breached the middle bollinger band. This suggested that more bearish pressure might surface to take the currency pair to the bottom bollinger band.
Looking at the EUR/USD weekly chart above we note that the currency pair is a doji for the week. As long as it remains below the middle bollinger band, we must not exclude the possibility of a bearish drive to the bottom band.
The middle bollinger band may now serve as an immediate resistance for the EUR/USD.
The apprehension level is high as traders await the upcoming European Central Bank announcement this week. In the previous meeting the president of the ECB indicated possible stimulus action in June. As I mentioned previously, with such a high level policy action upcoming, we would probably see little action for the EUR/USD. Indeed it is with the doji this week. Many investors are expecting a cut in the interest rate.
I would advise a very cautious approach this week as we cannot predict the actual action to be taken by the European Central Bank. Besides this, the monthly US Non-Farm Payroll is also due this week.
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