EUR/USD Weekly Forecast: 27th May to 31st May
The eyes of forex traders are on the move of EUR/USD currency pair in the coming week. There are various questions arising in the minds of financial gurus. What will be the behavior of EUR/USD currency pair during the next week i.e. 27th May to 31st May? Will the Euro retain its stability or will it move in response to major events such as German retail sales, employment data in Germany, Eurozone and inflation.
The forex world is receiving mixed signals from Germany (the largest economy of euro-zone). It failed to print satisfactory level of both services and manufacturing PMI. Its manufacturing PMI is not even up to the 50 point line. However, the situation is expected to get better in future as indicated by the IFO business climate that has jumped up to 105.7 points. It is expected to increase further to 110 points.
US Federal Reserve’s decision about its Quantitative Easing Program (QE) will be another major fundamental impact that EUR/USD will be undergoing. All the currencies and commodities are highly volatile since last two weeks amid speculation that US central bank is mulling over the exit or tapering of QE program being initiated in 2008, it was the most aggressive bonds buying policy in Fed’s 100-year history that caused US Dollar to weaken considerably over the past few years. Now if Fed decides to exit or even taper its QE policy, it will give rise to a highly bullish trend in US Dollar Index which has already gone higher against its major rival currencies.
Now let us have a quick look over the technical analysis of shared currency. Last week EUR/USD ended at 1.29261. The will face immediate resistance at 1.2977 ahead of 1.30335 and any move below this level will extend pair’s losses up to 1.31119, on the downside, immediate support is on 1.28439 ahead of 1.27655 and 1.27099.
Talking about technical indicators, RSI, Entry CCI and Trend CCI are bearish whereas Stoch is bullish in 1-hr chart In 4-hr chart, mixed signals are seen. Similarly, if talk about candle stick pattern, several shooting starts can be seen in 30-min and 1-hr chart indicating bullish trend in EUR/USD market.
Elsewhere, EUR/JPY which is another highly traded pair, was ended at 130.921 and is expected to meet immediate resistance at 132.644 and any surge above this level would trigger bullish trend upto 133.846, on downside, immediate support is seen at 130.098 and any move below this level, would extend losses upto 128.754. Stoch, RSI, Entry CCI and Trend CCI all are give bullish signals in 15-min and 30-min charts, whereas several bears can also be seen in high time frame charts.
It is pertinent to mention here that recent comments by the head of Bank of Japan (BoJ) in which he backed bulls , may cause breakout in EUR/JPY and the pair may nosedive up to second support.