Good day forex traders and readers.
It is almost midweek and I hope you did a great job trading the early week.
In the previous EUR/USD forecast we noted that the EUR/USD was on track to test the bearish support of 1.3080. The markets were generally shaken by the indication from the US Federal Reserve chairman Ben Bernanke of a possible reduction of stimulus.
Looking at the EUR/USD 4 hourly chart above we note that the currency pair remains drawn towards the support of 1.3080. The bollinger bands at this timeframe are providing an acceptable reference for support and resistance.
With reference to the bollinger bands, possible immediate support is 1.3050 while the immediate resistance is 1.3150.
The global markets were adversely affected by the US Federal Reserve chairman Ben Bernanke’s comments and it was observed that the various US Federal Reserve officials were trying to ease the turmoil by highlighting the fact that actions if any would be a reduction rather that an outright stop. As a matter of fact, emphasis were placed that the tapering of quantitative easing remained as only a possibility since the decision to do so would be dependent on the performance of the US economy.
It appears that sentiments may be stabilizing for now as the US equities are generally green. We should continue to monitor the market sentiments as an improvement may spur risk taking activities which could translate to demand for the euros.