Good day forex traders and readers.
How are you doing for this weekend? It is crucial to always observe the charts and be updated of the market conditions hence I always spend some time going through the various technical charts and you should too.
In the previous EUR/USD forecast we noted that the immediate support was 1.3680 followed by 1.3620. While both the US and the Euro Zone gave disappointing economic releases, the Euro currency remained well bid. Early into the trading week, the interim EUR/USD forecast noted a bias to the downside.
Looking at the EUR/USD daily chart above we note that the currency pair had a strong bearish momentum throughout the week. The immediate support posed little defense for the downside pressure.
The EUR/USD is now at a support region around 1.3480. I have highlighted the previous occurrences on the technical chart in red. Should this support fail, we may be looking at 1.34 and beyond. Any bullish return will probably need to overcome the resistance region of 1.36 – 1.3620 which I highlighted in green. Should the momentum pushes it beyond, the extended bullish target will be 1.38.
Do note that the bollinger bands had widen considerably indicating volatility. Caution is advised.
The US dollar was in high demand this week as major currencies fell against it. Commodities took a hit too. The sentiments were generally in favor of the US dollar.
The US has released a report indicating that German economic policy is hampering European economic stability and affecting global trade. The German officials are rejecting the claims.
Fitch has raised the outlook of Spain from negative to stable as it acknowledges the progress made. I personally feel that the pain the Euro Zone took to tighten up it’s coffers is paying off and we may be seeing a new era of financial prosperity for the euro area. Nonetheless nothing will ever win the will of the markets and I am getting reports of speculations of a possible European Central Bank rate cut this week. This might had also contributed to the bearish pressure.
This week will bring us the US Non-Farm Payroll and the ECB minimum bid rate events and these will likely have a high impact on the EUR/USD.