Good day forex traders and readers.
Welcome to another EUR/USD weekly forecast by yours truly The Forex Koala !
It had been a crazy whip saw week and I hope everyone had their seat belts on. Proper money management will allow you to trade another day should the unforeseen happens.
In the previous EUR/USD reviews we noted on the continued weakness of the Euro Zone. The budget deficit hit countries continue to drag the entire region and cause an increasing divide between pro austerity and anti austerity groups.
Looking at the EUR/USD daily chart above we note that the currency pair was bullish until it dipped towards the later half of the week. The EUR/USD then tried to recover its loses and ended slightly higher for the week. The bollinger bands worked and the middle band served as an immediate support. We noted that the EUR/USD once again made a higher low and higher high. This may suggest a start of a new bullish trend and hence close attention should be paid.
The dip midweek was caused probably by the cutting of rates by the European Central Bank ECB. The somewhat muted reaction suggests that the cut was quite expected. ( Remember I mentioned of speculations for some time now ) We probably should not be seeing more big dips unless adverse events occur.
Towards the end of the week, the high risk US Non-Farm Payroll came in much better than expected, driving the unemployment rate to a new low of 7.5%. I expect this to give the much needed sentiment relief to spur risk assets.
A word of caution would be to monitor the countries in the Euro Zone there are facing difficulties managing their debts. For example Slovenia.