Outlook for the Euro Dollar Exchange Rate This Week

The euro dollar exchange rate is today determined to recapture ground lost following last week's surprise interest rate cut.

Gains are today being witnessed across the board, however we will need to see a couple more days of gains for the recent weak bias to be vanquished.

As the below graph shows; momentum has turned back to the US dollar in recent sessions:

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Weekly euro dollar exchange rate forecast

Shaun Osborne is forecasting the euro dollar rate to consolidate through the course of this week:

"EUR/USD price action retains a weak bias through the close of the week, even though the market is showing signs of steadying around the 100-day MA.

"Loss of short-term (40-day) moving aver age and trend channel support this week, alongside the break under the 1.3450/60 high/low support zone—pivotal
for the markets since mid-September’s break higher—all confer a negative undertone for price action.

"Short-term trend momentum signals are aligned across an array of the short-term studies now—hourly through daily—which suggests limited scope for a counter-trend rally at present.

"We rather think the market will remain contained to the low /mid 1.34 area if the EUR can gain at all next week but we fully expect selling interest to be strong on any rally from here. We look for the loss of support around 1.33 (1.3294 is the 50% retracement of the 1.28/1.38 rally) to signal quicker losses to 1.30 in the next 2-4 weeks."

Just a reminder; US markets are closed today but it would seem this is not enough to keep the EUR/USD pair confined to recent levels though.

In lighter than usual trading conditions we could well find today's moves contain a touch of noise.