Good day forex traders.

In the previous EUR/USD forex forecast review we noted that the EUR/USD was in a ranging state. Although European equities were mainly green, not much lift in the currency pair was seen. Germany unemployment data would be released the next day and it might affect the currency pair.

Looking at the EUR/USD daily chart above, we note that the currency pair has broken the 1.3000 resistance. This suggests bullish pressure and a close above the 1.3 may suggest further bullish momentum. Having said so the SMA 20 lies right above and it may act as an immediate resistance as circled above. If it fails, 1.3200 may be the next target.

From a fundamental point of view, the Germany unemployment data was better than expected. This was probably due to a construction industry friendly winter as reported. Equities indices worldwide are mostly green and the EUR/USD is probably getting a lift from the risk taking sentiments.

The US Federal Open Market Committee meeting minutes will be released later and caution should be exercised. Monitor for any unexpected reaction in case of an adverse development.

Trade Safely.

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EUR/USD Forex Forecast Review 3 Jan 11

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