Good day forex traders.
Welcome to our weekly EUR/USD review. A new month has come upon us and how have your trading been so far? Hope it is doing good.
In the previous forecast we noted that the bollinger bands remained useful as indicators of possible support and resistance. 1.0900 might be the immediate support while 1.1180 might function as a bullish target. A worst than expected German ZEW Economic Sentiment brought negative pressure to the sentiment towards the euro currency.
Looking at the EUR/USD weekly chart above, we noted a bullish run. I am very pleased with our bollinger bands as it once again demonstrates it’s technical usefulness. Our 1.1180 bullish target mentioned last week materialised.
We are at a possible pivot region. I would expect a bullish momentum to target 1.14 while any bearish recovery is likely to bring us down back to 1.0900.
From a fundamental point of view, the negative sentiments surrounding the euro currency last week probably found a new target. The US Federal Reserve officials were reported to be suggestive of a stall in the interest rate hike momentum. Furthermore there was much disappointment when the US GDP came out much worst than expected. It was 1.2% instead of the forecasted 2.6%.
The poor GDP result brought about apprehension to many traders. It suggested that the US economic recovery is not doing as good as it should be. This equates to an increased possibility that the US Federal Reserve may put the interest rate hike plan on hold.
These developments probably bought about over bearing bearish pressure to the US dollar.
Among the various economic releases next week lies the US Non Farm Payroll. This is a closely monitored event and hence do be prepared for any unexpected developments. Proper money management is crucial.