Technical Outlook: The EURUSD rose to a fresh 4-year high last week as the U.S. dollar weaked and the ECB’s monetary policy did saw the central bank leaving monetary policy unchanged. However, the brief rally was quickly met with price retracement. By Friday’s close, EURUSD was seen consolidating near the 1.2423 level. We expect this consolidation to continue in the term as it could potentially form a bullish flag pattern. An upside breakout could see EURUSD extending further gains. But there is a risk as the rally has seen little retracements in the near term. Therefore, we expect a downside correction towards 1.2284 in case the bullish flag pattern fails. To the upside, price will need to rise above the previous highs posted at 1.2500 to post further gains.
Fundamental Outlook: The markets will be heading into the end of January and data from the Eurozone will focus on the economic performance for the first month of the year. The week ahead will be marked by preliminary CPI data from Germany, France and Spain. This will potentially suggest the state of inflationary pressures for the Eurozone during the month of January. The flash GDP estimates for the fourth quarter of 2017 will also be released this week. However, this poses no risk as the Eurozone GDP is expected close at a record high. Flash estimates are also expected from France and Germany during the week. On Friday, the flash PMI numbers will be confirmed with the final manufacturing and services PMI numbers for January..
Previous EURUSD Weekly Forex Forecast
EURUSD Weekly Forex Forecast – 29th Jan to 2nd Feb 2018
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