EURUSD Weekly Forex Forecast – 16th to 20th Jan 2017

Technical Outlook: EURUSD broken above the 1.0600 handle last week. On the 4-hour chart, price action is seen trading above the resistance level at 1.0615 – 1.0595. As long as this price level holds and support is confirmed here, EURUSD could be looking at further gains in the near term, targeting 1.0850 at the very least. The bullish bias could however come at risk if price falls below 1.0595. In this case, further downside could be expected towards the price region of 1.0450 and could potentially keep EURUSD pinned below the resistance level at 1.0595 and the support level at 1.0367. The 4-hour chart also shows the potential bullish flag pattern that has formed on EURUSD. This puts the minimum upside to 1.0785.

Fundamental Outlook: The European Central Bank’s meeting this week will be the main event as far as the single currency in concerned. After the central bank announced an extension to the bond purchases at a smaller scale of purchase, the ECB is expected to remain on the sidelines. Still, officials at the central bank will need to acknowledge the recent uptick in inflation which according to the initial estimates puts headline inflation in the eurozone at 1.1%, while core CPI is forecast to rise 0.9%. This would be encouraging signs although Draghi and team are likely to maintain a slightly dovish tone to ensure that the single currency does not appreciate too much. Besides the ECB meeting this week, other data includes, final inflation figures from Germany and the Eurozone.

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EURUSD Weekly Forex Forecast – 16th to 20th Jan 2017 – Bearish