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EUR/USD Weekly Forecast: Push Upwards and Sustained Higher Technical Values

The EUR/USD went into this week keeping its optimistic bullish sentiment on display as the closing value of 1.08670 remained within sight of near-term highs.

EUR/USD Weekly Forecast - 19/05: Push & Sustain Up (Chart)

  • The 1.08000 ratio in the EUR/USD was penetrated higher on Tuesday the 14th of May and prices were sustained above this key psychological level the remainder of the week.
  • The EUR/USD has been enjoying bullish sentiment in a sustained manner most of May as financial institutions have begun shifting their sentiment towards a weaker USD outlook.
  • Economic data from the U.S this past week via the Consumer Price Index coming in under expectations, provided additional impetus for the EUR/USD to maintain its higher price ratios.

On Wednesday of this past week the EUR/USD touched the 1.08965 ratio which had last been seen on the 21st of March. And although the high water mark for the EUR/USD was not able to sustain the loftier speculative highs, the currency pair closed trading on Friday still within eyesight of the marks as it went into the weekend near the 1.08670 ratio. Technical traders who are wagering on fractional values via pips might look at the differential as it having closed significantly lower, but financial institutions who have shifted towards bullish sentiment will likely not be disappointed because they tend to hold positions for the mid and long-term.

EUR/USD Shift in Sentiment and Considerations to Come

The EUR/USD upwards swing has correlated to the broad Forex market, which is no surprise since the currency pair is a catalyst in the financial markets. While behavioral sentiment has taken an optimistic outlook regarding the potential of the U.S Federal Reserve to now consider interest rate cuts, the U.S central bank is unlikely to lower its Federal Funds Rate in June.

This means there is the potential that financial institutions may be getting too far ahead of economic data which could still provide shocks in the coming weeks and months. While the EUR/USD has certainly attained a solid amount of gains, questions regarding resistance now need to be contemplated. Is the 1.09000 level a bit too high for the EUR/USD still, last week the currency pair was certainly pushed back when it came within sight of the higher value.

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    Technical Perspectives Test are Coming for the EUR/USD

    Having made solid gains the past two and a half weeks, the EUR/USD will now have to deal with a rather quiet week of economic data ahead. This means technical traders are likely to take control of the Forex market and existing behavioral sentiment will get tested. Resistance levels will be targeted by those with bullish sentiment, but the question is if there will be enough momentum to drive values above the highs made last week.

    • Opening price action in the EUR/USD should be watched closely to see if existing sentiment continues to create some upwards mobility.
    • The 1.08800 level may prove a testing ground for higher values and it this level is penetrated and sustained it may attract more bullish wagering.

    EUR/USD Weekly Outlook:

    Speculative price range for EUR/USD is 1.08070 to 1.09045

    The trend upwards in the EUR/USD has been strong, but recent memories and glances at technical charts should be a swift reminder that momentum higher has run out of power throughout trading early this year. However, some traders may be counting on the notion that a psychological shift is taking hold which will allow for higher prices to be sustained.

    Support levels should be watched and if the 1.08500 to 1.8400 values can hold onto their strength, reversals which seek buying positions may be seen. Early this week the range of 1.08400 to 1.08800 should be watched. If financial markets remain calm and U.S Treasury yields continue to show signs of erosion, the USD may remain within a weaker perspective and allow for the EUR/USD to climb higher. However, traders should not get overly ambitious regarding their higher targets and be willing to use take profit orders before sudden momentum reverses.

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    Robert Petrucci
    About 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.
     

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