Good day forex traders.
With the recent narrow trading of the EUR/USD, I know of many forex traders who had losses due to excessive scalping. To make matter worst, they often had very tight stop losses. While scalping can be a way to make profit, do note that irregularities always happen in forex and hence tight stop losses may be rather prone to being hit before having the currency pair move along the intended direction! Proper money management is a must as always. I personally am not a big fan of scalping and all attempts always end with mixed results.
In the previous EUR/USD forecast we noted on a support at 1.2960. I cautioned against any possible bullish correction targeting the 1.3100 / 1.3150 resistance. The better than expected US Non-Farm Payroll probably injected positive sentiments into the global markets as the US employment market picks up.
Looking at the EUR/USD chart above we note that the 1.2960 support remained valid and as mentioned previously, the bullish correction did happen and the currency pair tested the resistance of 1.3100.
We continue to note that the region of 1.3 is pivotal to the currency price action. Upper limits remains to be 1.3100 / 1.3150 while the lower immediate support is 1.2960. The RSI suggests that the bearish momentum has faded a fair bit.
Recent Euro Zone politics seem to be shifting towards the reduction of austerity matters. While many hope that this means an end to the Euro Zone budget deficit crisis, experts fear that this is simply a yielding to union pressure. A number of Euro Zone countries like Greece are still under bailout terms and unemployment is still rising.
The upcoming week features a number of important economic events. We get to view the latest insights from the US Federal Reserve and also the German ZEW Economic Sentiment. Masoud previously mentioned that an adverse economic development is probably needed for 1.3 to fail and hence we should keep this in view.