Good day forex traders.
Welcome to our weekly forecast of the popular currency pair EUR/USD. Representing two major economies of the world, it has very strong implications.
In the previous EUR/USD forecast we noted that the bullish momentum was not established. A channel of 1.11 to 1.14 might still be valid. It is prudent to understand this.
Looking at the EUR/USD weekly chart above we note that the currency pair remains capped by 1.14 for now.
I want to highlight the resistance of the 1.14 region. It is evident in the chart above. A few readers wrote to ask why did the EUR/USD not go up yet. They are stuck in long positions.
We have to understand that being a major resistance, it is likely that we need a major influence from the markets to establish a foothold above it. Do not take unnecessary speculative risk.
Channel boundaries remain at 1.11 to 1.14. Immediate bullish push may target 1.15.
From a fundamental point of view, the equities depression in the beginning of the year have more or less passed. Risk appetite has increased drawing interest away from safe havens like gold, yen and usd.
There is an increasing sentiment among analysts that the US dollar rally is nearing an end as it falls out of favor with the traders. This is likely due to the recent dovish stance of the US Federal Reserve.
If the above scenario plays out, we are likely to see the EUR/USD climb.
A number of developments may shift the balance though. For example the exit of Britain from the Euro Zone. This is why I always advocate understanding the markets rather than just trading it.
The upcoming week brings important economic releases such as the US Retail Sales. Do practice proper money management.
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