Good day forex traders.
It had been a rocky forex trading week and i hope everyone is doing well. Do always have proper money management and stay frosty. Emotional trading kills your margin account!
In the previous weekly EUR/USD forex forecast we noted that the currency pair had fallen below 1.32. The Greek government had reached an agreement on the implementation of austerity measures required for further financial aid. Having said so, it is a complex situation as citizens, unions and even ministers were opposed to the idea. The global financial markets continued to be affected by the developments of the Greek budget deficit crisis.
Looking at the EUR/USD chart above we noted that both ends of the channel had been tested. The strong support and resistance region of 1.3 and 1.32.
SMA 20 = flat
SMA 50 = flat
Both SMAs had turned flat and this is an indication of uncertainty with regards to currency pair movement. A bearish scenario will probably see 1.3 tested again while any possibility of a bullish momentum will need to see a full green candle closed above 1.32 first.
Earlier in the week there were resistance towards the Greek agreement among the Euro Zone finance ministers. A number of them were reported to be preferring that the upcoming bailout is to be confirmed only after the upcoming Greek election. This probably devastated sentiments and sent the Euro currency down as seen above. Having said so later in the week, positive developments started to occur and Germany was even reported as commenting that the bailout deal would be confirmed soon. China and Japan were also reported to be committing financial assistance via the International Monetary Fund. This probably spurred the EUR/USD rally which saw it recovering from 1.29+ right up to 1.32+.
The above further confirms that the foreign currency exchange market remains very much driven by the developments of the Euro Zone budget deficit crisis, in particularly Greece. The volatility is high and hence extra care must be taken. Pay close attention to ongoing developments.
When in doubt staying on the sidelines can be an account saver!
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