Good day forex traders.
Welcome to our latest forecast for the EUR/USD. Did you have a good trading week? I hope you did.
In the previous EUR/USD forecast we noted that the bulls eased off for the week. The range was limited from a technical point of view.
The upper bollinger band was turning out to be a strong resistance. This remained as our extended bullish target. The immediate resistance was likely to be the former support of 1.12. A continuation of the bearish momentum would likely see 1.1 as the next extended target. This is also the region of the middle bollinger band. From a long term point of view, the EUR/USD remains bounded in a wide channel with no sides of the market gaining a foot hold.
Looking at the EUR/USD weekly chart above we note that the currency pair was bullish for the week. It was capped by the middle bollinger band after having dipped below it in the week before.
From a technical point of view, the bollinger bands remain as good technical indicators of support and resistance levels. To gain further on the upside, we definitely need to see a clean break from 1.1. The immediate resistance is likely to be 1.113 followed by 1.12. The extended bullish target will be the upper bollinger band.
A bearish recovery will likely target 1.08 followed by the lower bollinger band. As of now, the EUR/USD remains in the long term channel mentioned previously.
The US dollar generally weakened against other currencies this week. However due to the concerns plaguing the euro zone, the momentum was weaker for the EUR/USD. The apprehension of the possible exit of Britain from the Euro Zone and the migrant crisis weighted upon the single currency.
Looking at the gold chart above, we can see that the price remains elevated. This suggests continued risk aversion. Global concerns regarding the slowdown of China probably contributed to the worries. China mentioned that it’s economy faces a tough challenge.
Over in the US, while the US Non-Farm Payroll turned up positive, wages dipped. This gave investors thoughts that the US Federal Reserve interest rate cut progress may not be as soon as expected.