Good day forex traders.
Welcome to the weekly review of the popular EUR/USD. I hope you had a wonderful trading week.
In the previous EUR/USD forecast we noted that the currency pair remains bounded to the pivot region of 1.12. A squeeze breakout might be in the works as the range narrowed.
From a technical point of view, we can see that the EUR/USD closed around the 1.12 pivot again. We are right again as the currency pair continues to be influenced by this region.
It is a good time to be cautious as the narrowing range may bring about a classical technical squeeze breakout. Possible support and resistance levels may be 1.1 and 1.135.
The US Non-Farm Payroll report was released last Friday. The BBC has a report on this and I quote,” The US economy created 156,000 jobs in September, official figures show, slightly fewer than expected.
However, August’s figure was revised higher to 167,000 from 151,000. Both figures are lower than 180,000 average for this year.
The unemployment rate edged up to 5% from 4.9%, although that was due to more people looking for work. .”
We do note that the US dollar dipped momentarily before recovering. This is not unexpected as it is still a positive gain with a relatively low unemployment rate. The most important factor to consider now is how each development affects the possibility of an interest rate hike. There are talks that the stock markets are correcting in view of the upcoming hike. This is due to the anticipation that easy money ( low interest loans ) will be limited soon.
Next week brings more important economic data releases such as the German ZEW Economic Sentiment and US FOMC Meeting Minutes. Any unexpected development may trigger a breakout. Do practice proper money management.
Trade safely and do share this forecast to your friends!