Good day readers.
How was your forex trading for the week? Most traders are off for the holidays but a few koalas did write in to share their success. Well done!
In the previous EUR/USD forecast we noted that the currency pair tested the middle bollinger again and failed. It was an excellent situation when our technical analysis worked like clockwork. 🙂
After failing to breach the middle bollinger band, bearish momentum took over and sent the EUR/USD towards 1.08 as forecasted. The support region held and the currency pair had since eased back to 1.086.
If the bearish correction managed to push beyond 1.08, we might expect extended bearish targets at 1.06 and 1.05. Bullish return would see the EUR/USD head towards 1.1 again for a retest of the resistance region.
Looking at the EUR/USD weekly chart above we note that the currency pair tested the middle bollinger band again! This is as per our previous forecast of 1.1. A few of our readers wrote in to give thanks and we are happy. Just be mindful it is not always Christmas :p . Always be careful when trading as forex is never 100% predictable.
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The 1.1 region is shaping out to be a strong resistance for now. Having said so it is always necessary to drop to the shorter timeframe to observe as nothing is forever.
Should the resistance fail, we may see an attempt to achieve 1.12 by the bullish traders. Bearish recovery will likely target the 1.08 support region.
The economic data release schedule is light due to the year end season. The recent US interest rate hike saw the markets reacting as expected. There is no knee jerk reaction as the development was already priced in. As far as the EUR/USD is concerned, we may see a possible shift towards the US dollar. This is especially if the European Central Bank continues to engage in an easing monetary policy.
The US unemployment claims is due to be released next week. The job market is always a critical indicator of the economy and hence it is important that we pay attention. Low volume market condition is likely to persist. Do ensure that you practice proper money management.