EURUSD Weekly Forex Forecast – 23rd to 27th July 2018
The markets for the week ahead will see the release of the flash manufacturing and services report from the Eurozone. With the final trading week of July, we expect to see that economic momentum in the eurozone remained broadly unchanged during the month. The ECB’s monetary policy meeting is also one of the main events this week. No changes are expected from the central bank after it announced its tapering decision only in June.
Data from the U.S. is mostly limited to the durable goods orders report for the month. Other data includes trade figures which are expected to shed insights into the pace of GDP growth during the month. The U.S. advance GDP report is also due this week. The report covers the second quarter of the year and will show how the U.S. economy performed during the period.
Chart set up: The EURUSD currency pair was seen falling below the support at 1.1627 last week before posting a strong recovery. The gains pushed the currency pair to test 1.1713 level before easing back. Although price action continued to remain trading sideways, we anticipate a bullish momentum that is emerging.
Key support/resistance levels:
Support: 1.1627; Resistance: 1.1777
Commentary:
The week ahead will see some important releases that could impact the EURUSD currency pair. Among these, the advance GDP report from the U.S. and the ECB’s monetary policy meetings will have a direct impact on the currency pair. On the 4-hour chart we notice the potential for an inverse head and shoulders pattern being formed. While this pattern is still evolving, a pullback off the inclining neckline resistance could indicate a retracement back toward the 1.1620 – 1.1650 level. Forming a right shoulder at this level could trigger strong gains on a subsequent breakout from the inclining trend line. For the week ahead, the EURUSD currency pair is expected to be flat to bullish.
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