Good day forex traders.
Welcome to our weekly review of the EUR/USD currency pair. I hope trading was good for you for the past week.
Previously we noted a breakout from our pivot region. The bollinger bands continue to be a significant predictor of currency influence.
Looking at the weekly chart of the EUR/USD, we see that the currency pair is now back to the support and resistance region of 1.1. A clear break from this area will open up 1.08. Should the bullish recovery gain momentum, 1.112 may be targeted.
From a fundamental point of view the US economy continues to maintain a slow but steady progress. Economic data remain on the positive side.
Bloomberg reports “U.S. economic growth picked up in the third quarter after an uninspiring first half of the year as a build in inventories and a soybean-related jump in exports helped cushion softer household spending.
The 2.9 percent annualized increase in gross domestic product, the value of all goods and services produced, was the biggest in two years and followed a 1.4 percent gain the prior quarter, Commerce Department data showed Friday. The median forecast in a Bloomberg survey called for 2.6 percent growth. Consumer spending, the biggest part of the economy, rose a less-than-projected 2.1 percent.
The data are in sync with the views of Federal Reserve policy makers that the economy is making slow and steady progress. At the same time, solid employment and steady income gains are a sturdy base for households to continue in the role as the economy’s main driver of growth, a contrast with the drag from business investment.”
If this plays out well, we may see continued strengthening of the US dollar. The US Federal Reserve Federal Fund Rate event is due this coming week and a number of investors may speculate a rate hike.
The US Non-Farm Payroll is due too and without doubt investors would be looking out of positive signs contributing to a rate hike scenario. This is if no rate hike happens during the week.