Good day forex traders.
Welcome to our latest EUR/USD review. Hope you had a great week generating pips!
In the previous EUR/USD forecast we noted that the currency pair was bearish for the week. The middle bollinger band was effective as a resistance.
The EUR/USD is range bounded between 1.08 and 1.1020. No doubt any bearish or bullish momentum would need to breach the respective support and resistance.
As a new year begins, close monitoring of the shorter timeframes is recommended to determine the price action. We can use the lower and upper bollinger bands as possible extended targets.
Looking at the EUR/USD weekly chart above we note that the currency pair was bullish for the week. It did attempt to test 1.08 but the support held. Our middle bollinger band worked again.
Looking at the momentum, we can conclude that the middle bollinger band resistance is strong. In the upcoming week, we will need to observe the price action in this region. A clean breach may open up the upper limits at 1.12 and 1.14.
Should the bearish momentum return to test 1.08, failure of the support may open up the lower bollinger band as an extended bearish target.
The US Non-Farm Payroll clocked in better than expected. Investors are likely monitoring developments to determine if the US Federal Reserve will continue to hike interest rate.
Across the Atlantic, the German Factory Orders came in at 1.5% versus the forecasted 0.1%. This brought optimism to the market.
For the upcoming week, it is crucial to monitor the situation of the Chinese equities market. We have seen the far reaching effects of the sentiment fallout. Important economic releases such as the US unemployment claim and Retail sales are due too.