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EUR/USD Weekly Forecast 21 Aug 16

Good day forex readers.

How was your forex trading for the week? I hope you gained some pips.

In the previous EUR/USD review we noted that the currency pair was bullish due to positive developments in the euro zone. Our bollinger bands remain a useful reference for possible areas of support and resistance.

Looking at the EUR/USD weekly chart above we note that the currency pair continued it’s bullish momentum.

It is now facing the resistance level of 1.1420 which happens to be in the area of the upper bollinger band too.

Should the EUR/USD continue on it’s bullish climb and breach the resistance, we may expect a bullish target of 1.16.

A bearish recovery will likely have the currency pair test the middle bollinger band first.

From a fundamental point of view, the US Federal Reserve is probably facing pressure to hike the interest rate soon. The recent uncertainty has taken it’s toil on the currency pair. A number of analysts speculated that the current economic situation of the US may not support further interest rate hikes.

As mentioned before, an interest rate hike is likely to increase the demand for a currency and thus strengthening it.

Over across the Atlantic, it remains to be seen if further monetary easing is required. The European Central Bank is facing a challenge as the economies of it’s member countries are in various stages of recovery and growth.

Look out for the important economic releases next week which includes the German Ifo Business Climate and US Unemployment Claims.

Trade safely.

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