Good day forex traders.
Welcome to our weekly forex review of the EUR/USD. I hope you had a great week trading the currency pair.
In the previous EUR/USD forecast we noted that the currency pair had attempted to stretch below the support of 1.12 but had since settled around it. The middle bollinger band had once again proved to be useful for the indications of price action. A clear breach of the 1.12 support / middle bollinger was needed before an attempt of the bearish target at 1.1. The bullish recovery was likely to target 1.14.
Looking at the EUR/USD weekly chart above we note that the currency pair did continue to bounce off the support / middle bollinger band as expected.
It tested the 1.14 bullish target as mentioned and had since eased below.
It is important to observe the price action in the upcoming week. Bullish momentum will no doubt test 1.14 before a clear breach leads towards 1.16. Should bearish recovery wrestle over control, the support level / middle bollinger band of 1.12 will likely be targeted.
The US FOMC meeting minutes gave insight into the absence of an interest rate hike and brought about apprehension to the markets. Investors had been speculating of an interest rate hike for sometime now and the disappointment was growing. Citing the weak global economic climate, analysts considered the possibility of a longer hiatus. The prospect of such brought upon selling pressure to the US dollar.
The European Central Bank did not embark in further major additional easing so far and analysts who took a very optimistic stance are shifting support to the euro currency. Having said so it was reported that the ECB is aware of the current challenging economic situation and quantitative easing may continue longer than planned.
It is crucial to continue monitoring developments that may impact the US interest rate hike.