This coming week of trading will start with the EUR/USD near the 1.05840 ratios having accomplished another incremental climb via technical charts. The move higher by the EUR/USD on a weekly basis has now brought the currency pair within sight of values last traded in early June of 2022.
The high for the EUR/USD last week was achieved on Thursday when the Forex pair challenged the 1.07345 realms. This move was on a spike of buying created when the European Central Bank confirmed anticipated speculative expectations by raising their key interest rate by 0.50%.
The hike by the ECB also mirrored the moves made by the U.S. Federal Reserve and Bank of England last week. The dose of clarity from the leading central banks was welcomed by financial institutions, although plenty of concerns remain regarding inflationary pressures and interest rate outlooks for this winter and spring of 2023.
Reversal lower after a long-term high in the EUR/USD was demonstrated
After accomplishing the higher price ratios with solid buying developing on Tuesday, Wednesday, and Thursday of last week, reversals lower were displayed too. It should be noted that Friday’s close was below the lowest depths of the EUR/USD which were seen on Thursday which were around the 1.05925 mark. Speculators may also question the inability of the EUR/USD to maintain a value above the 1.06000 ratios for a sustainable time period.
The EUR/USD has incrementally climbed in value, but it continues to deliver punches to day traders which makes it a difficult currency pair to speculate on without the use of proper risk-taking tactics. This coming week also needs the consideration that holiday trading will start to affect market conditions and that decreasing transaction volumes could lead to sudden bursts of volatility. However, because of the bullish trend which has developed in late September in the EUR/USD, it is possible that support levels will continue to attract speculators who are looking for upside momentum to continue its trajectory in an incremental manner.
- The German GfK Consumer Climate statistics will be released this Wednesday, but the more important data will be the U.S Consumer Confidence reading on Thursday.
- Holiday trading will certainly start to affect the EUR/USD at the end of this coming week, and traders need to be prepared for the potential of thin volume which can cause abrupt price changes in unbalanced markets.
EUR/USD Weekly Outlook:
The speculative price range for EUR/USD is 1.05080 to 1.07790
The EUR/USD has remained within its known short-term price range rather well but has definitely exhibited an ability to test highs too. Intriguingly, the EUR/USD has also demonstrated a rather firm line of support which continues to climb incrementally. The low for the EUR/USD this past week was near 1.05065 on Monday the 12th of December. The low in the previous week of trading was around the 1.04450 ratios on Wednesday the 7th of December.
If support ratios continue to be durable this could prove tempting for speculators who view technical lows as a place to wager on upside momentum. Now that the ECB, BoE, and Fed have raised their interest rates in unison and offered a rather similar soundtrack to economic outlooks, financial houses may be tempted to believe the current price equilibrium for the EUR/USD is fair. The upcoming Christmas and New Year holidays will certainly affect trading conditions, traders must be braced for quiet conditions with sudden random bursts of volatility, meaning risk management is essential.
Looking for an upside in the EUR/USD in the coming week remains a tempting thought perhaps for many speculators, but they should not be overly ambitious. The reversal lower after attaining new highs on Thursday of last week is a reminder that the upwards trend is often met with resistance. A move over the 1.06000 mark for the EUR/USD remains a key barometer for the currency pair, wagering on this feat could prove dangerous this coming week, and realistic targets are urged for traders.
