Good day forex traders.
Second day of the week and i hope everyone is geared up for a green week of pips!
In the previous EUR/USD forex forecast review we noted that the SMAs have turned flat and the currency pair could go either ways. We were observing weak fundamentals too as hopes of stimulus policies such as quantitative easing were fading.
The EUR/USD had broken through the 1.32 line. This suggests strong bearish pressure. The immediate support would probably be the SMA 50. Should the bearish momentum continue, we would be looking at a possible extended bearish target of 1.3.
The main concern for investors today is probably the contraction of the European economy in the fourth quarter. This has far reaching effects as it is feared that this may further strain countries facing budget deficit difficulties. There are fears that the European economy may further shrink and the rising unemployment rate in the region brings about a negative outlook.
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