Forex Guides

EUR/USD Weekly Review 31 Dec 11

Good day forex traders. 

Today is the last day of 2011. How was your forex trading? If you are in the green, congratulations and may 2012 be excellent! If you are in the red, do take the time during this holiday to review what went wrong. Proper money management is a must and forex trading is never about getting rich fast. I had 3 margin calls before i learned this lesson but you need not! You have us to remind you now 😛

We noted previously that the EUR/USD is bearish due to the continued Euro zone budget deficit crisis. Investor confidence towards the region’s economy and currency is very much affected.

Technical Analysis

Looking at the EUR/USD daily chart above, we note that the bearish momentum is strong.

SMA 20 = Bearish
SMA 50 = Bearish

Both SMAs are bearish and this indicates a strong possibility of a bearish momentum. Furthermore the SMA 200 which is an indicator for possible long term trend is bearish too. So far, this has been reflected by the bearish drop as seen above. It is interesting to note that the SMA 20 is functioning as an immediate resistance of sorts for now. Any possible change of trend will need to see this resistance broken first.

Having said so in view of the low volume and low liquidity, unexpected currency pair movements may occur.

Fundamental Analysis

The outlook for the Euro zone is not looking good. With the various euro zone governments rushing to implement austerity measures, sentiment has yet to benefit from a viable concrete solution to the problem. The 17 nation region continues to seek for the ultimate solution.

On the contrary, the US economy is looking rosier and recovery appears to be gaining momentum with the recent economic data. The upcoming US Non-Farm Payroll will be a data to monitor closely.

Once again, in view of the low volume and low liquidity, be careful of unexpected spikes. If you must trade, proper money management is a must.

Trade Safely.

Related Forex Articles from the Koala Forex Training College. 

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