Good day forex traders.
Welcome to another of our weekly EUR/USD forecast by The Forex Koala! I hope you made money during the week. I had a little profit and that is enough for me 🙂 Do remember that forex is never about getting rich overnight. Having such a concept may cause emotional trading which is no good.
In the previous EUR/USD forecast we noted that the immediate resistance will be around 1.2950. With the US Non-Farm Payroll due the week, caution must be exercised due to the possibility of unexpected spikes.
Looking at the EUR/USD daily chart above we do note that the currency pair became bullish towards the end of the week. It tested the resistance of 1.2950 and went beyond. Probably as a result of the volatility from the US Non-Farm Payroll.
1.3 can often be a strong resistance and hence we should be monitoring it for clues to the price action. As uncertainty is high, we will go with the basic support and resistance for now. 1.3100 / 1.3000 / 1.2900 and 1.2800 as an extended bearish target.
The European Central Bank ECB this week gave the impression that it’s monetary policy will remain accommodating as emphasis continue to ensure an economic environment conducive for growth. While this is probably good news for the region, caution is advised as the worst than expected US Non-Farm Payroll figures might dampen sentiments. Nonetheless the drop of unemployment rate of the US to 7.6% is very much welcomed by investors.
We have a number of important economic announcements next week for the US and we should pay attention to them. We cannot deny that both the US and European economies face challenges and often the EUR/USD is a gauge of which economy is the least implicated of both.