EURUSD Weekly Forex Forecast – 17th to 21st July 2017
Technical Outlook: The EURUSD continued to maintain the bullish bias with price posting a strong reversal after falling to 1.1400 handle. The upside momentum is currently showing some weakness with the 4-hour Stochastics currently still lower. There is also the possibility that EURUSD is carving out a head and shoulders pattern. Watch for a reversal at the current level of 1.1470. A reversal here could mark the right shoulder with EURUSD likely to push lower. A break down below 1.1400 will trigger the head and shoulders pattern. To the downside, support is seen at 1.1200 which could be tested. Alternately, if EURUSD attempts to push higher then further gains can come only on a breach of the previous high nearr 1.1484.
Fundamental Outlook: It is going to be a busy week for the euro currency. Amid a rather quiet economic calendar, this Thursday’s European Central Bank (ECB) meeting will be the highlight. No monetary policy or QE changes are expected at this week’s ECB meeting. Traders will however be focusing on the forward guidance from the ECB. Given the hawkish statements made by ECB president Mario Draghi, investors will be looking at the timing on when the next taper to the ECB’s QE program will come. Expectations are rife that this could be as early as September. Draghi will of course need to play a balancing act to keep the euro subdued while at the same time deliver the hawkish statement. Besides the ECB’s meeting, other data points include Tuesday’s final inflation figures from the Eurozone.
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