EUR/USD: Weekly Forecast 10th September - 16th September

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The EUR/USD went into the weekend near the 1.06982 a depth it has not traversed since the first week in June. The bearish momentum within the EUR/USD has continued and likely caused anxious moments for speculators who have insisted on pursuing reversals upwards. The lower price action of the EUR/USD has been sustained and the currency pair’s penetration of 1.07000 late last week and ability to sustain values below is probably rather surprising for many people.

While many analysts point to weaker European economic numbers, particularly from Germany, technical and fundamental traders should also acknowledge that a large amount of risk-averse trading and pursuit of U.S Treasuries is a culprit too regarding the weakness of the EUR/USD. The correlation of higher paying yields from U.S bonds is having a profound effect on the USD as it has gained strength across the Forex board. The lower price value of the EUR/USD reflects what other major currency pairs teamed against the USD are also experiencing.

Traders Pursuing Bearish Momentum of EUR/USD Remain Steady

The EUR/USD demonstrated its highest values early last week and simply continued to erode in price as the week went along. A high of nearly 1.08090 was seen early last Monday, but the EUR/USD incrementally lost value. On Tuesday of last week, a strong dose of price velocity downwards was seen when the EUR/USD hit a mark of nearly 1.07055, following the return of full volume as U.S financial institutions returned from their long holiday weekend. The EUR/USD stumbled near lower depths until Thursday when additional bearish price action developed.

Perhaps the strong lower move upon the return of the U.S. financial institutions last Tuesday indicates that U.S. traders were executing a stream of orders waiting for them via their overseas counterparts. Nervous sentiment remains a factor in current EUR/USD trading and the broad markets in general. The inability to create an upward reversal which could be sustained last week, signals conditions remain under bearish sentiment. Traders looking for upside price action in the EUR/USD may have to practice patience.

European Data and the ECB await EUR/USD Speculators in the Days Ahead

  • German ZEW Economic Sentiment will be released this Tuesday and a negative reading is anticipated. A German 30-year bond auction will take place on Wednesday.
  • The European Central Bank will announce its Main Refinancing Rate on Thursday and no change is expected to the interest rate.

EUR/USD Weekly Outlook:

The speculative price range for EUR/USD is 1.06040 to 1.08005

Behavioral sentiment is likely going to remain the primary source of power in the EUR/USD this coming week. Having traded below the 1.07000 ratio, speculators will now watch early this week to see if the currency pair can recover some upward mobility and move above this level. If the EUR/USD remains below 1.07000 during the first two days of this week, this could be taken as another additional sign of weakness.  There have been displays of violent price velocity within the EUR/USD on occasion over the past couple of weeks and this should make traders cautious.

Day traders may actually have an advantage in the current Forex markets because of their timeframe perspectives. While there are likely plenty of traders who are looking for reversals higher to eventually be seen in the EUR/USD over the next few weeks, this upward momentum has not occurred yet and may find more headwinds blocking its path higher. Traders with the ability to look for quick-hitting trades to simply take advantage of technical support and resistance levels while making wagers that are not anticipating massive movements might be far better positioned to pursue the EUR/USD under the current market conditions.

Traders who do believe the EUR/USD can move lower should look at six-month charts to see where the currency pair traded in the last week of May and the first week of June this year. The EUR/USD was able to traverse to a low of nearly 1.06350 momentarily. Nervous conditions which are being seen in the broad markets are making it difficult to look beyond a few days for speculators. Conservative leverage needs to be used and traders should use take profit and stop loss orders to work with the EUR/USD as it moves near mid-term lows.


Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.