Good day forex traders.
The past week was an exciting one for me. If you have not read about it, i started a live ZuluTrade account to experience first hand whether is this forex signal service a viable source of some income 😛 You can find it above under My ZuluTrade Progress in the menu above!
In the previous weekly EUR/USD forex forecast, we noted that as far as the SMAs are concerned, we were still having bearish possibilities. The region of 1.3 – 1.31 was to be monitored. If the currency pair went above the SMA 50, a change of trend might be happening. Fundamentally the S&P downgrade of countries in the Euro Zone had little effect. Equities continued to show progress suggesting that the risk appetite was apparently good.
Looking at the EUR/USD daily chart above, we note that the SMA 50 failed to resist the bullish momentum and the currency pair went on to test the 1.32 region.
SMA 20 = Bullish
SMA 50 = Neutral
Forex traders i mentioned that when the SMA 50 failed, we may be looking at a new bullish direction. While this is not 100% definitive, it is important to note that the short term SMA 20 has turned bullish and the medium term SMA 50 is now flat neutral. When both SMAs turns bullish with a cross over of the SMA 50 by the SMA 20, we may see a sustained bullish momentum.
The Euro Zone continues to struggle in it’s fight against the budget deficit crisis. Talks held regarding Greece were providing little concrete agreement as private bondholders wanted the involvement of the governmental bondholders too on taking a loss on Greek debt. The European Central Bank ECB was reported to be against this. An agreement is critical as the second bailout from the Euro Zone and IMF for Greece is tied to a successful accord with Greece’s bondholders. Greece faces a 14.5 billion euro bond redemption on March 20.
It was reported that Euro Zone officials are discussing about a plan to intervene directly in Greece’s austerity measures to ensure compliance to cost cutting efforts. This is opposed by Greece on grounds of national sovereignty. I mentioned always that sovereign issues are frown upon by the markets and hence pay attention to this.
Fitch Ratings cut the credit ratings of Italy, Spain and three other European countries.
A collection of important economic data is due this week including the US Non-Farm Payroll.
Related Forex Articles from the Koala Forex Training College.