The EUR/USD sustained value last week and then experienced strong buying after the U.S Fed’s Meeting Minutes report was issued on Wednesday.

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The EUR/USD (FXE) will begin this week of trading around the 1.03850 ratio having enjoyed a rather remarkable handful of trading days.  On early Monday of last week the EUR/USD was trading near the 1.02250 realm but managed to find important support and then start incrementally climbing. On Wednesday the 23^rd of November the EUR/USD was politely traversing the 1.02950 support level when a thrust of buying action suddenly hit Forex.

At the apex of its trading last week on Thursday, the EUR/USD challenged the 1.04500 ratio, but did not break through.  The increased buying in the EUR/USD centered on the U.S Federal Reserve’s Meeting Minutes report, which indicated the U.S central bank is likely to begin showing signs of less hawkish interest rate policy. The potential outlook of interest rates being hiked in a more dovish manner added to the ‘positive’ behavioral sentiment in financial houses which have believed a more ‘dovish’ policy was likely mid-term.

Having Established Intriguing Technical Support the EUR/USD should be watched

Having put in rather intriguing technical support levels last week and having delivered an incremental climb higher even before the U.S Federal Reserve’s report, the EUR/USD should be monitored closely. Fundamentally there is still plenty of reason to be suspicious of the EUR, but the potential exist that the European Central Bank will have to increase their interest rates more aggressively compared to the U.S Federal Reserve now.  

While betting on the ECB is a dangerous and foolish game perhaps, technically the EUR/USD has also shown that bullish sentiment is developing in the currency pair.  Having provided speculators and financial houses the notion that parity is now in the rear view window, the EUR/USD is still within the lower realms of its long term values historically. Support levels near the 1.02000 level should be monitored; this looks like a solid technical depth unless a major surprise was to unfold. The 1.03000 mark below is a key ratio now, and if this level holds it could indicate a more bullish trajectory near-term.

• Traders should keep in mind that full trading volumes will hit the EUR/USD early this week, if the EUR/USD sustains its current price values, this could spur more buying within the forex pair.
• It will be a big week of data in the U.S including GDP numbers on Wednesday and employment and earnings statistics on Friday. Because of the data and current technical values, volatility could develop in the EUR/USD particularly if it is managing to sustain its higher price range.

EUR/USD Weekly Outlook:

Speculative price range for EUR/USD is 1.02800 to 1.05280

Support levels will prove very important on Monday and Tuesday. Full trading volume in the EUR/USD has not been seen since Wednesday of last week. If current values continue to test early July 2022 ratios, traders looking for downside price action may want to reconsider being aggressive. If the EUR/USD moves lower, but stays above the 1.03000 mark, traders inclined to be sellers should be cautious and not be overly ambitious. A move below the 1.03000 level would be surprising technically, and if there are no major ‘news events’ this could be a solid place to look for reversals higher.

The EUR/USD is still within the lower depths of its long-term price range. The bearish trend that it has endured has been long and brutal for traders attempting to look for reversals higher. However, recent price action since early November seems to have established an incremental climb, which actually began to show signs of emergence in late September when the EUR/USD sputtered to a low of nearly 0.95300. If the EUR/USD can stay above the 1.03500 level early on Monday and maintains a value, buyers may believe there is additional room to explore upwards. A move above the 1.04000 mark that is sustained could ignite more bullish sentiment near-term. From a speculative wagering perspective, it appears the EUR/USD may be worthwhile as a buying opportunity while using solid risk-taking tactics.

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