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EUR/USD Weekly Outlook And Predictions
"2 weeks back: The first indication of a near-term bottoming will come if the pair manages a break over 1.3547. This level was not only a previous resistance but such a break will also indicated that the psychological resistance of 1.3500 is not working. However a better indication will come only if there is a decisive break over 1.3600."
The Week Ahead for EUR/USD
EUR/USD went as high as 1.3621 before closing for the week at 1.3591.
The break over the psychological ranges of 1.3500 to enter 1.3600 indicate the underlying bullish sentiments. However the loss of momentum after two failures at 1.3621 and the loss of momentum suggests the possibilities of some consolidation before another recovery. In our Forex Daily Dose of last Friday we had indicated a support at 1.3580. The pair seems to be finding support there. In case the resistance at 1.3621 holds and a break below 1.3580 takes place then some more drop towards 1.3555 to 1.3568 support zone may take place. With these supports holding, any decisive break over 1.3621 should take EUR/USD towards the next resistance zone of 1.3680 to 1.3688. In case EUR/USD manages a decisive break over 1.3690 then it should target a very strong resistance zone of 1.3770 to 1.3785.
EUR/USD had fallen very strongly from 1.3832 and the fact that it had failed much below 1.3900 indicates that the psychological resistance of 1.4000 is very strong. On the other hand the recent gains after the fall does not show a strong momentum. Considering these facts even in case of further gains we shall remain in favor of another fall before a retest of the recent 1.3832.
Our near-term outlook will stay bullish as long as the price action remains over 1.3490. Any failure of 1.3490 support would start making the outlook neutral and in case such a move takes place then we will expect a retest of 1.3399. The near-term outlook will turn bearish to indicate a topping if the pair falls below 1.3399. Such a move will turn the focus for deeper consolidations towards 1.3294 or more. While saying this we also wish to mention that during the first week of September a strong support was witnessed at 200-day moving average. The subsequent fall had found the support 34 pips above the 200-day moving average. The current 200-day SMA is just above 1.3294 at 1.3307 and hence 1.3294 may again prove to be a strong support in case of another fall.
Please check the relative strengths of recent economic releases as the aid for this week's forecast of EUR/USD:
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