Forex Daily Forecast, Analysis and Prediction

EURUSD breaks below 1.3089 support and the fall from 1.3738 extends further to as low as 1.3017 level. Deeper decline is expected to 1.2750 or even lower.

by: iForex.bg
On Friday Euro/Dollar made an insignificant upward movement. After breaking the key resistance level at 1.3450, the currency pair reached a peak at 1.3488 but closed lower at 1.3479.

After brief retreat, the greenback is regaining momentum today on talk of bankruptcy of GM and Chrysler. There are rumors that US President Obama believes a quick, negotiated bankruptcy is the most possible way for GM to restructure.

EUR/USD 1.3232 - 30 March EUR/USD Open 1.3265 High 1.3588 Low 1.3206 Close 1.3584 Euro/Dollar climbed to the 1.3588 level on Friday morning, after which sharply decreased as expected with over 350 pips, which is a prerequisite for downward trend with targets towards 1.3100, followed by 1.3025.

The Dollar is looking strong verses the Yen and looks to be forming a bull flag that could move to the upside with a target of a previous resistance level of 99.00.

Weakness of the Dollar continues to grow as the Euro gained over 700 pips for the last 3 business days. The currency couple broke the resistance at 1.3650 - which is 51.8% Fibonacci correction of the wave 1.2461 - 1.4713.

The FOMC made the announcement yesterday that they would be buying $300bn in US Treasuries and $750bn mortgage backed securities. They maintained the Interest Rate at 0-0.25% whilst CPI (Feb) gained 0.4% as expected. The USD was beaten after the FOMC announcement dropping over 2%.

Euro/Dollar made a significant upward movement yesterday. Upward pressure is still there, as we saw strong movement above 1.3150 during the U.S. session, as we expected.

The Euro reached the low point against the Dollar on March 4th with a price at 1.2456. Since that date the pair has had a strong bull run moving all the way to 1.3072.

EUR/USD is in a broad consolidation, after bottoming at 1.2331 (Oct.28,2008). Technical indicators are neutral, and trading is situated below the 50- and 200-Day SMA, currently projected at 1.3292 and 1.4721.

Technical: The Dollar is set to be the dominant currency in the forex market this week, as the banking crisis returns to the forefront. The banking share slump and the bullish Oil prices may hurt the Dollar this week, as traders bet against the greenback.

EURUSD resistance and support remains at the same positions, and none of them were broken yet. In this situation candles are heading towards resistance line at 1.4111, and if it is broken, a positive trend can start.

Gold rose slightly on Thursday as a retreat in the U.S. dollar helped to tempt back some buyers.