Good day forex traders.
Welcome to our weekly review of the popular currency pair of EUR/USD. Did you trade well for the week? I hope you did.
In the previous forecast, we noted that the currency pair was facing significant upside resistance. With the new US President sworn in, many were observing what actual policies would be implemented.
Looking at the weekly EUR/USD chart above, we noted that the currency pair hit resistance at the middle bollinger band. We remain pleased that our bollinger bands often react as expected.
The EUR/USD appears to be attempting to test 1.08. We can observe that the resistance is significant. It is thus crucial to drop down to the shorter time frames to monitor momentum.
In a BBC report, we are informed of a weak US GDP performance ”
The US economy grew at an annual pace of 1.9% in the fourth quarter of last year, according to official figures.
That was slower than the 2.2% growth rate economists had been expecting and below third quarter growth of 3.5%.
For the year, GDP rose by 1.6%, the slowest since 2011 and down on 2015 when the world’s largest economy expanded by 2.6%.
President Donald Trump has promised to lift GDP growth to 4%, through tax cuts and infrastructure spending.
The last time that America’s economy grew at that rate was in 2000, the year of the dotcom boom, when it expanded by 4.1%.
While consumer spending rose in the quarter between October to December, the US Commerce Department said there had been a slowdown in exports and an increase in imports. ”
A slowdown in exports may be a concern as it affects revenue. With the President Trump’s relatively tough stances, increasingly investors are worried of a weaken prospect in the US. A trade war with China or Mexico is likely to dampen the US economy.
This week brings about the important US Non-Farm Payroll. With December’s report coming in weak, all eyes are on this upcoming report. A weak report may indicate reversal of the US economic growth. Do trade safely.