The EUR/USD is now above 1.12 and below the upper bollinger band. This is like the immediate support and resistance levels. Further bullish momentum will likely see 1.14 should the upper bollinger band fail.

A bearish recovery may see 1.1 tested. Once again it is important to observe the shorter timeframes for an indication of price action.

Fundamental Analysis

One of the factors contributing to a stronger US dollar was the anticipation of a higher interest rate. With the recent dampened sentiments surrounding the future of the US Federal Reserve interest rate hikes, it is inevitable that the green buck takes a hit. The expectation is that the current market turmoils and depressed oil prices are likely to delay any interest rate. Gold prices are gaining as risk aversion increased.

China’s slowing pace of growth will likely add negative pressure on the global economy.

Over in the Euro Zone, ECB President Mario Draghi mentioned that the persistently low inflation would bring about a review and possible recalibration of the central bank’s stance in March. This comment brought about increased optimism due to the prospect of easing monetary conditions.

Next week brings the release the US FOMC Meeting Minutes and important economic data such as the German ZEW Economic Sentiment.