Good day forex traders.
I hope everyone is having a wonderful Good Friday weekend. Spending quality time with your loved ones is important in these demanding times of the modern society.
In the previous forex forecast review of the EUR/USD, we noted that while both SMAs were bullish, a cross over of the SMA 20 towards the upside of the SMA 50 should happen first before considering any possibility of further rallies. Having said so 1.34 is usually a strong resistance and the SMA 200 which reflects long term possibilities was still bearish and might act as a resistance.
We noted that a bullish rally did not happen. In fact the opposite happened. I LOVE IT WHEN MY SMAs work!
SMA 20 = flat
SMA 50 = flat
With both SMAs flat, uncertainty is high. It was a bearish week with only some recovery on the last trading day. Watch out for the region of 1.3 which is traditionally a strong support and resistance line. The long term SMA 200 remains bearish.
The US Non-Farm Payroll last Friday was worst then expected. While the US unemployment rate did drop to 8.2%, many reports indicated that the lesser job grow is a testimony to Ben Bernanke, US Federal Reserve chairman, warning of moderating job growth.
Over at the Euro Zone, the woes of the budget deficit crisis continues to haunt as it was reported that Spain may face a financial crisis. It has a high unemployment rate of over 20% and the recently announced cuts will probably without doubt add more strain to the fragile economy. Spain’s increasing borrowing costs does little to help the situation and the Prime Minister of Spain was reported earlier this week to have said that the country is in extreme difficulty.
We may be heading into a risk aversion period. Try to avoid risky trades at the start of the week until the effects of the US NFP settles in. More analysis is needed to see if the sentiments will drop.
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