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EUR/USD Weekly Forecast 8 May 17

Good day forex traders.

Welcome to the weekly review of the popular currency pair EUR/USD.

In the previous forecasts we were made aware of the various technical and fundamental considerations. A recent theme would be the concern of slowing US economic growth. Positivity picked up in the Euro Zone as inflation climbed.

Looking at the EUR/USD weekly chart above we note that the currency pair remained bullish. It is now testing the 1.1 region.
If the bullish momentum manages to overcome 1.1 in the upcoming week, we may see a push for 1.12.

A return of bearish pressure will likely target 1.08.

The latest US Non Farm Payroll release is better than expected. BBC reports ”

US jobs growth staged a bigger recovery than expected in April as businesses added 211,000 posts.

Figures from the US Department of Labour also showed the unemployment rate dropped slightly to 4.4%, compared with 4.5% in March.

The rebound in the jobs market could pave the way for the US central bank to raise interest rates in June.

The economy needs to create 75,000 to 100,000 jobs a month to keep pace with growth in the working-age population.

An unemployment rate of anything under 5% is considered to indicate full employment. The rate of 4.4% is the lowest since May 2007.

The rise in employment was driven by the leisure and hospitality sectors, health care and social assistance, financial activities and mining. ”

As mentioned previously, employment gives a good gauge of the economic situation. This development is likely to increase positive sentiments for the US dollar. Anticipation of interest rate hikes may increase demand.

Having said so, in forex we need to consider both sides of the currency pair. Over in the Euro Zone, a number of analysts are pegging the recent strength of the Euro currency to the possibility of a French election in Mr Macron’s favor. He is said to be a liberal centrist and is pro-business and a strong supporter of the European Union. Close monitoring of the outcome and effects is important.

Next week brings important economic data such as the US Retail Sales. The ECB president is due to speak too. Proper money management is important in case of any unexpected development. Trade safely.

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