Good day forex traders.
Welcome to our weekly review of the EUR/USD.
In the previous EUR/USD forecast we noted that the currency pair remained near the pivot of 1.12. The line of 1.12 was shaping up into an important region. The observation of the EUR/USD suggested that movement was still rather sentiment based. Over in the US, worst than expected economic data were released.
Looking at the EUR/USD weekly chart above we note that the currency pair was again ranging around the pivot of 1.12. I had mentioned previously that this region would see much action unless a new critical development arrives to move expectations significantly.
I am paying closer attention to see if the currency pair continues to shorten in range. Should that happens we may be looking out for a squeeze and break out formation.
We should continue to expect areas of influence at the bollinger bands.
From a fundamental point of view, both sides of the Atlantic continue to face their respective challenges. Euro Zone faces complications with it’s members in various economic conditions. In the US, growth is not as fast as expected.
An article from BBC commented on the US interest rate hike and I quote,” Minutes from the Federal Reserve’s September meeting show the majority of policy-makers expect a rise in US interest rates by the end of the year.
At its meeting, the Fed opted to hold rates between 0.25% and 0.5%.
But three officials opposed the decision – the most dissents since December 2014.
The Fed said: “The case for an increase in the federal funds rate has strengthened,” but said it would wait for more evidence of economic progress. ”
The interest rate hike is not happening as fast as anticipated by investors and this means that the hype may have already priced in.
Next week brings a number of important economic data such as the German Ifo Business Climate. Both the US Federal Reserve chair and European Central Bank president are due to speak too. Do practice proper money management in case of any unexpected developments.