Good day forex traders.
Welcome to our weekly review of the EUR/USD. With the recent focus on this currency pair, I hope you managed to secure some pips.
In the previous forecast we noted that the EUR/USD remained within the 1.06 region. It is likely a significant support resistance zone.
Looking at the EUR/USD weekly chart above we noted a spike up to the previous support turned resistance region of 1.08. Having said so, the bulls couldn’t not hold their positions and had given way to a dip back down to the 1.06 region.
As mentioned previously this region is likely to be of significant influence. Therefore we have to observe the shorter timeframes for any momentum.
The European Central Bank announced that the bond buying program will be extended. BBC reports ”
The European Central Bank has said it will extend its bond-buying programme until at least December 2017, but cut its purchases by €20bn a month.
The €80bn-a-month quantitative easing scheme had been due to end in March, although the bank had been expected to extend it for at least six months.
In a move that surprised markets, the ECB said it would only buy bonds worth €60bn a month from April. ”
It would appear that the Euro Zone remains under significant economic pressure. It was also reported that the European Central Bank mentioned that it would be ready to increase the duration of amount of the bond purchase should economic conditions slide.
This week will be an important one as the US Federal Reserve funds rate announcement is due. It is anticipated that the US Federal Reserve will hike the interest rate. This may result in a stronger US dollar. The US retail sales statistic will be announced too.
We should continue to be prudent so as to minimize risk should any unexpected development occur. Trade safely.