Simultaneous Release at
Good day forex trading koalas.
In the previous EUR/USD weekly review we noted that the fears of an irreversible US default is mounting as the budget deficit continues to add to the American public debt. Furthermore it is expected that the US economic growth slowed down in the first quarter of 2011 due to rising fuel costs.
Looking at the EUR/USD chart above we note that the currency pair is currently at a technically crucial stage.
It is practically impossible to predict if the EUR/USD will continue to pursue a bullish path or to start a bearish correction.
The EUR/USD enjoyed a bullish week and the FOMC statement in midweek probably contributed to it. Investors are expecting that the interest rates will be kept minimal in the near to medium term and this is probably causing the US dollar to weaken. While the quantitative easing exercise is due to end on schedule, a number of economists are calling it a disappointing stimulus. The FOMC also mentioned that inflation is temporary and the job market remains a concern. This brought more speculations regarding a low interest rate environment.
The bullish rally has come far and wide. Many people are calling for a correction and a stronger US Dollar. Personally i feel that the current situation is rather uncertain due to the conflicting factors. Fundamentally the high interest rates differential between the US Dollar and other major currencies are creating a demand pull for the currencies against the US Dollar. However the technical factors suggest that the bullish momentum is overextended and many technical traders are looking at the 1.48 – 1.5 region as the hard ceiling of resistance.
With the US Non-Farm Payroll due next week, uncertainty is high and many will be looking if the data will continue to be positively “blessed” like the previous months.
I am currently on the sidelines until i see further indications of a bullish continuum or bearish reversal.
Related Forex Articles from the Koala Forex Training College.
READ more Forex Articles and Daily EUR/USD Reviews by The Forex Koala at
©2011 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.