Good day forex traders and readers.
Here comes the weekend and I hope you are having a good time. Did you make money from forex trading this week? I sure hope you did!
In the previous EUR/USD forecast we noted that the currency pair failed to gain any bullish momentum after the previous attempt to conquer 1.4. It was testing 1.38 and fell just below it. Any continued bearish momentum might bring 1.368 followed by 1.36. Our forex writer Elmar had identified a long term bearish trend on the monthly chart. From a fundamental point of view, this might be a possibility.
Looking at the EUR/USD daily chart above we note that the currency pair remained below 1.38 for the close of the trading week. I had redrawn the support and resistance lines in line with my periodic analysis renewal exercise.
There seems to be an immediate support at the 1.3720 level. Any further bearish momentum will likely see supportive action around 1.36, 1.365, 1.368.
Any bullish momentum will need to overcome possible resistances at 1.38, 1.385 and 1.393.
It is interesting to note that there were actually good economic data released for the euro zone but yet the euro currency remains mulled. This is in line with what I have mentioned last week. The European Central Bank had given various indications that a weak euro currency is beneficial to the monetary stability of the region. Hence the markets are wary of any bullish moves in fear of any central bank intervention.
In addition, the recent continuation of the tapering plan by the US Federal Reserve further sent a signal of affirmation that the money supply can only tighten going forward. A mix of credit withdrawal and also the preference of the US dollar due to increased interest rate hike possibility is now affecting the markets.
The US Non-Farm Payroll is due this coming week. Besides the usual caution needed, this may also serve as a good indication of the momentum of the US Federal Reserve tapering action. Monitor this event closely.
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