Note: The EUR/USD forecast is updated during every weekend and take into account various factors which are expected to affect the relative price action of euro and the U.S. dollar.
EUR/USD Weekly Outlook And Predictions
EUR/USD had broken over the key resistance of 1.3739 to move as high as 1.3773 but hesitated before 1.3800 and dropped to 1.3685 before closing for the week at 1.3739.
The break over 1.3739 had strengthened the bullish outlook for further gains but considering the sideways moves of the last week and the fact that the daily highs have been getting lower, we stay neutral initially. On the downside even if there is any break below the recent 1.3685, a strong support will be expected in the range of 22-day EMA and 55-day EMA, which mark this support zone as 1.3669/1.3642. This support zone also gets strength from the support of the approaching 1.3500 ranges.
With the above mentioned support in place, a break over 1.3773 should make EUR/USD to target 1.3800 to 1.3819 next. A decisive break above 1.3819 may find some immediate resistance near 1.3833 which is the 61.8% retracement of the fall from 1.4940 to 1.2042 but a break there should target a retest of 1.3894 key resistance before attempting the test of 1.4000 major resistance and then possibly 1.4240 as indicated in the above mentioned post.
However if the immediate resistances hold and any decisive break below 1.3640 takes place then it will be considered as the first sign of the possibilities for some extended consolidation. Even in such case the outlook will not start turning to bearish side as long as the price-action stays above 1.3562. A break of this key support will start making the short-term outlook as bearish for a retest of 1.3476 to 1.3482 support zone.
From a longer-term perspective, the other view of the recent price-action tells us that the recent jump had completed the 61.8% retracement of the fall from 1.4940 to 1.2042. This retracement level was at 1.3833 and the break over suggests that a break over 1.4000 cannot be ruled out and if such a move takes place then the next target should be 1.4247 to 1.4250 resistance. Interestingly 1.4250 is 76.2% retracement level of the above mentioned fall from 1.4940 and this level is just 3 pips above a very strong resistance faced during the last week of October 2011. You may please check all these fact at "EUR/USD at two years high but is it done? A peek into the year 2014
Please check the relative strengths of recent economic releases from the Euro zone and the U.S.:
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This update on EUR/USD outlook is written by the analysts of ForexAbode.com. Do contact us for any questions, suggestions or feedback.