This ending week was all about fear, with crude oil prices reaching over 12-year lows, and worldwide major indexes plummeting to levels not seen in over a year. And all of this happened in a week where China was down on holidays, and refrained from publishing macro data!
Investors concern these days is growth, particularly after Janet Yellen expressed its concerns on how things are going on in the world's largest economy. Also, fueling risk sentiment was the Sweden Riskbank, cutting rates further into negative territory by surprise, from the previous -0.35% to -0.50%. The move fueled fear over the profitability of the European banking sector, sending shares plummeting. Yields fell, with UK ones at record lows and the 10y US note down to 1.53%, its lowest level in two and a half years.
Surprisingly, risk sentiment eased on Friday, mostly because some market talks pointing for an agreement between OPEC and non OPEC producers, to cut oil output, or at least, freeze it at current levels, according to Venezuela proposal. Nevertheless, no official announcement has been made, which means that risk-averse trading can resume sometime next week.
View the Live chart of the EUR/USD
Anyway, the dollar trades generally higher across the board, and the EUR/USD pair eases from a fresh 3-month high of 1.1375 achieved this Thursday, but holds well into gains weekly basis, above the 1.1200 level. Poised to close in the green for a third week in-a-row, the daily char is showing limited signs of upward exhaustion, as the technical indicators turned sharply lower from oversold levels, but the price remains far above its moving averages. Moreover, the 20 SMA heads sharply higher, and is pointing to overcome the 200 SMA, in line with further advances for the next week.
The pair has an immediate resistance around 1.1375, and if it breaks above it, the 1.1460 region seems the next logical target, a line in the sand for bulls, given that the level contained rallies for most of the past 2015. A huge battle between bears and bulls should be expected it the price reaches the level, and if bulls finally win it, the rally could be far more interesting during the rest of the month, with the next bullish target at 1.1620.
The first support to care about it 1.1120, as below it, bears can take over the pair, with 1.1000 and 1.0880 as the next levels to watch and probable bearish targets.
Latest updates on the EUR/USD Forecast
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.