EURUSD Weekly Forex Forecast – 17th to 21st Sept 2018
Fundamentals Outlook
The week ahead will see a mix of both economic and monetary policy drivers pushing the markets. In the Eurozone the final inflation figures will be due on Monday for the month of August. The main highlight of the week will be the Bank of Japan’s monetary policy meeting that is due on Wednesday. No changes are expected from the BoJ which tweaked its policy just recently by pushing back the inflation target timeline. This is followed up a day later by the Swiss National Bank’s monetary policy meeting. The SNB is expected to keep the 3-month LIBOR unchanged at this week’s meeting as well. However, we can anticipate some changes in the near term especially with the ECB tightening its policy. From the U.S. the economic data covers mostly the housing markets. Given the recent decline in home sales the housing starts and building permits will give a glimpse into the construction activity in the sector.
Chart set up: The EURUSD advanced to highs of 1.1718. The rally to this level marked a retest of the highs from August 28. However, the currency pair retreated by Friday falling back to 1.1627. The rally came after price action broke past the resistance level noted last week.
Key support/resistance levels:
Support: 1.1627; Resistance: 1.1718
Commentary:
The overall trend in the EURUSD remains mostly flat. Despite the rally breaking past the resistance level, the common currency was seen easing back on the gains. However as support is now being formed at 1.1627 which previously served as resistance, we expect to see the potential for further gains. As the EURUSD marks higher lows and highs with higher support levels being established, we anticipate a change in the trend gradually. As long as the support at 1.1627 holds, the euro could be seen attempting to break past the new resistance level of 1.1718. This could see price extending the gains toward 1.1900 level. To the downside, if the common currency fails near the support, we expect a move back to the previous range. For the week ahead, the EURUSD is expected to be flat.
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