Good day forex traders.
Welcome to our weekly review of the EUR/USD currency pair. Looking back to the previous week we note that the EUR/USD had been ranging for sometime now. Sentiments played an important role and we would need a major shift for further action. It was crucial that we paid close attention.
From a technical point of view we note that on the weekly chart the EUR/USD is still interacting with the pivot region of 1.12. The bollinger bands are narrowing and this may suggest an upcoming squeeze and breakout scenario.
Taking reference from the bollinger bands, we can expect possible support at 1.1 and resistance at 1.135.
The past week saw generally good economic data from both sides of the Atlantic. This might be the reason for the sentiment impasse. A major expectation will be the US Federal Reserve interest rate hike plan. Investors would probably expect action before further rallying behind the US dollar.
Looking at the oil chart above, we note that it is testing a resistance around $50. OPEC has announced plans to cut production in a bid to provide uplift to the oil price. Investors are looking closely as oil is intrinsically interwoven with the global economy. An immediate impact of raising oil prices would likely be the boosting of oil related industries and the tightening of economies dependent on oil.