Good day forex traders and koalas.
In the previous EUR/USD forecast we noted that the EUR/USD was bearish and the immediate support might be the previous consolidation region of 1.3320. There were talks recently of the stronger value of the EUR/USD hurting exports. Such dovish comments might affect sentiments.
Looking at the EUR/USD chart above we noted that the currency pair attempted to recover right up to the mid week. After which the EUR/USD was overwhelmed by bearish pressure and tested the 1.3320 mentioned last week. I love it when my chart works 🙂 Now if the bearish pressure continues, a failure of 1.3320 may bring us to 1.3250. A bullish correction will likely see some resistance at 1.3400 first. We are also on the support region of a longer term bullish trend line and hence it will be crucial to monitor the price action here.
I have been reading a number of opinions and analysis and I found a theme interesting that I want to share. The report goes by the view that the recent rally of the euro currency is not sustained by a fundamental backing. The argument goes by the fact that recent economic data from the region has been disappointing. Greece and the few other nations with budget woes remain so and that recent events such as Spain’s political issues may threaten to ignite adverse conditions again. It is believed that the support of the euro currency comes more of political reasons rather than economic. When the truth hits the fan, we may see a reversal of the recent gains.
Next week brings a number of crucial economical data releases. ECB President Draghi is due to speak early week and data from the such of the German ZEW Economic Sentiment will present with more insights to the direction of the EUR/USD. As usual monitor the price action early week. We need to see how the EUR/USD will adjust to weekend events such as the G20 meetings.