Good day forex traders.
In the previous EUR/USD forex forecast review we noted that the currency pair had broken the 1.3 region and that suggested bullish pressure. Having said so we understood too that the SMA 20 which might act as an immediate resistance as it was just above the price action and hence it might cause a bearish dip from a technical point of view.
Looking at the EUR/USD daily chart above, we observe that the SMA 20 did function as an immediate support again! I LOVE IT WHEN MY SMA WORKS ! 😛 The EUR/USD dipped sharply and is now testing the support region of 1.2900. If it fails, 1.28 may be the next target.
From a fundamental point of view, the euro zone budget deficit crisis is probably causing risk aversion. The announcement by an Italian bank Unicredit of a 7.5bn euro sale of new shares is apparently causing speculation that European banks need to raise capital. It was reported that the European Central Bank saw overnight deposits from financial institutions rise to an all time high and the Luxembourg Prime Minster mentioned that the European Union is facing a recession of unknown scope. Sentiments were probably affected.
Economic data such as the German Retail Sales and Italian Unemployment Rate is due tomorrow. Not forgetting US’s ADP Non-Farm Employment Change and more. Be careful of adverse results and have proper money management.
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