- There was optimism that the Federal Reserve’s hiking cycle was done.
- Data revealed a larger-than-expected drop in Americans filing new jobless claims.
- Fed meeting minutes revealed a cautious stance toward monetary policy.
The EUR/USD weekly forecast is shaped by a bullish trend, propelled by the weakening of the dollar amid optimism surrounding the Fed’s pause. Consequently, this has led traders to expect potential rate cuts.
–Are you interested to learn more about scalping brokers? Check our detailed guide-
Ups and downs of EUR/USD
Although the EUR/USD ended higher for the week, it barely moved due to the US Thanksgiving holiday. However, the primary catalysts were the Fed minutes and data from the US. The dollar fell amid optimism that the Federal Reserve’s hiking cycle was done. Moreover, the economy remains strong enough to avoid a recession.
Economic reports on jobless claims, durable goods, and consumer sentiment showed an easing but suggested the economy could stay robust enough for a soft landing.
Meanwhile, the minutes from the Fed’s last meeting revealed a cautious stance toward monetary policy. Nevertheless, market participants are starting to prepare for rate cuts.
Next week’s key event for EUR/USD
Next week, crucial data from the US, including GDP and manufacturing PMI, will provide insight into the economy. Notably, the GDP report will reveal whether the economy expanded or contracted, while the PMI report will indicate manufacturing sector business activity.
This week, there was an increase in bets for Fed rate cuts due to recent downbeat data from the US. Still, Fed minutes showed the Fed would remain resilient though cautious in its fight against inflation. Therefore, if data next week comes in lower than expected, there might be an increase in expectations for Fed rate cuts. It would also result in more dollar depreciation.
EUR/USD weekly technical forecast: Bulls rally to 1.0950 resistance
On the technical side, the EUR/USD price is bullish, and the price has risen to the 1.0950 resistance level. Further supporting the bullish bias is the RSI trades near the overbought region. Moreover, the bulls are finally making strong swings away from the 22-SMA.
–Are you interested to learn about forex robots? Check our detailed guide-
In the coming week, bulls might experience some resistance at the 1.0950, resulting in a pullback. However, given the bullish bias, the price will likely pause at the 22-SMA, which acts as support in the uptrend. Nevertheless, if bulls are strong enough, the price will break above 1.0950 without pulling back. This move would then allow bulls to retest the 1.1100 resistance level.
Looking to trade forex now? Invest at eToro!
67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Share
Saqib Iqbal
