EUR/USD Weekly Forecast and Analysis – Action Forex
The EUR/USD pair saw a continued rally last week, with a strong break of the 1.1138 resistance level indicating that the larger uptrend may be resuming. This bullish momentum suggests that the initial bias is on the upside for the upcoming week, targeting the 161.8% projection of the move from 1.0665 to 1.0947 from 1.0776 at 1.1232, followed by the 1.1274 high. However, a drop below the 1.1097 minor support level could lead to intraday consolidations.
In a broader perspective, the breach of the 1.1138 resistance suggests that the corrective pattern from the 1.1274 high has likely completed at 1.0665. A decisive break above 1.1274 would confirm the continuation of the uptrend from the 0.9534 low in 2022. The next target would be the 61.8% projection of the move from 0.9534 to 1.1274 from 1.0665, projected at 1.1740. This scenario remains favorable as long as the 1.0947 resistance turned support level holds.
Looking at the long-term picture, a bottom has been established at 0.9534, indicating a bullish trend reversal. The significant break of the 55-day EMA, currently at 1.1018, is seen as the initial signal of this reversal. However, a firm break above the structural resistance at 1.2348 is necessary to confirm this bullish outlook. Without this confirmation, the price action from 0.9534 could still evolve into a consolidation pattern.
Factors Affecting EUR/USD Outlook
Several factors are influencing the EUR/USD pair’s forecast and analysis for the upcoming week. The ongoing geopolitical tensions, particularly between Russia and Ukraine, have been a major driver of market volatility. Any escalation in these tensions could impact risk sentiment and lead to fluctuations in the currency markets.
Additionally, the monetary policy decisions of the European Central Bank (ECB) and the Federal Reserve will play a crucial role in shaping the EUR/USD trajectory. Any hints of policy tightening or easing from these central banks could affect the exchange rate dynamics.
Furthermore, economic data releases, such as GDP growth, inflation figures, and employment reports, will provide insights into the health of the Eurozone and the US economies. Strong economic indicators could bolster the EUR/USD pair, while weak data could weigh on the currency pair.
Technical Analysis and Key Levels to Watch
From a technical perspective, the EUR/USD pair has shown strong bullish momentum, with the break of key resistance levels suggesting further upside potential. Traders will be closely monitoring the 1.1138 and 1.1274 levels as key resistance points, with a decisive break above 1.1274 signaling a continuation of the uptrend.
On the downside, the 1.1097 support level will be crucial in determining short-term price action. A drop below this level could lead to consolidations before the pair resumes its upward trajectory. Traders should also keep an eye on the 55-day EMA at 1.1018, as a break above this moving average could further bolster the bullish case for the EUR/USD pair.
Incorporating a mix of technical analysis and fundamental factors will be essential in navigating the EUR/USD market in the coming week. Traders and investors should stay informed about the latest developments and be prepared to adjust their strategies based on changing market conditions.
Overall, the EUR/USD pair’s outlook remains positive, with the potential for further gains in the near term. However, traders should exercise caution and closely monitor key levels and market dynamics to make informed trading decisions.
