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EUR/USD Forex Forecast Weekly Review 5 Feb 12

Good day forex traders.

Time flies. One month down, eleven more to go for 2012! This is our fourth year providing our koala forex reviews and i hope it has helped one way or another over the years 🙂 To be always green in pips is our goal !

In the previous EUR/USD forex forecast review we noted that the SMAs were turning bullish. In fact the short term SMA 20 had already began to slope up. The immediate concern of the Euro Zone budget deficit crisis probably remained to be Greece as an apparent stall in discussions occurred. Private and public debt holders were seen to be different in their opinions.

Technical Analysis

Looking at the EUR/USD chart above, we note that the 1.32 region continued to put up a tough resistance. This is historically evident too. 

SMA 20 = Bullish
SMA 50 = Flat

As the SMA 20 continues to climb, a flip over of SMA 50 and the turning into bullish by the SMA 50 itself would indicate a higher possibility of a sustained bullish momentum. We can observe that the 1.3 – 1.32 regions seemed to be the range for now. The SMA 50 may function as an immediate support too.

Fundamental Analysis

The US Non-Farm Payroll was much better than expected. Clocking an increase in employment and a decrease in the unemployment rate, positive sentiments were echoed in major markets as risk taking activity spiked. 

Over in the Europe region, officials continued to find ways and means to avert a Greek default. The latest developments mentioned by unnamed sources seemed to be hinting at a sale of ECB held Greek bonds to the European rescue fund in an attempt to circumvent the reluctance of ECB to take losses on it’s Greek bond holdings. Such bonds would be sold at cost price. With a major bond redemption due in March, officials are feeling the pressure to find a concrete solution for Greece.

Regardless probably fueled in part by developments in the US and the resilience of Germany and France, the STOXX 50 which is a index of 50 European blue-chip stocks is gaining and is 8%+ positive year to date.

Next week brings more crucial economic data and discussions. The European Central Bank ECB is due to release the minimum bid rate too and hence do pay close attention.

Trade Safely and say NO to margin calls.

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