EUR/USD Weekly Forecast 14/07: EUR/USD Surges Higher (Chart)

(MENAFN- Daily Forex) The EUR/USD finished last week's trading within highs last seen in the first week of June, this as U.S economic data shifted behavioral sentiment and caused buyers to rush in.

• The EUR/USD finished Friday's trading near the 1.09043 mark, attaining a high last seen on the 4th of June.
• Political intrigue has been a strong discussion point among many analysts regarding the outlook for the EUR/USD based on unknowns regarding the French political landscape, but behavioral sentiment about the USD and U.S federal Reserve proved again last week it is the ultimate power in the currency pair.

The EUR/USD started last Monday's trading near the 1.08000 level. Concerns about the lack of a coalition government in France following the Parliamentary elections caused noise. However, the EUR/USD was actually able to show a rather solid amount of stability and the lows seen in late June when the currency pair traded below the 1.07000 mark has seen incremental buying power emerge. Yet, a real force upwards for the EUR/USD certainly was delivered this past Thursday.

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EUR/USD Price Velocity as Resistance Proved Vulnerable

The EUR/USD was trading near the 1.08500 level on Thursday when U.S Consumer Price Index data was released and came in below expectations. The sudden emergence of weaker inflation data from the U.S generated immediate buying in the EUR/USD and the 1.09000 realms clearly came into sight. The belief that inflation in the U.S may be eroding impacted financial institutions which were made to consider the possibility the U.S Federal Reserve will have to be more dovish than anticipated.

Thursday's highs in the EUR/USD did reverse lower, but the 1.08600 vicinity started to become rather durable support when technical charts are glanced. The EUR/USD finished Friday stronger with another surge higher and tested the 1.09100 vicinity twice, this before going into the weekend with some slight selling. However, the ability of the EUR/USD to remain above the 1.09000 and this as a starting point for the coming week is rather intriguing Sentiment and Questioning the Higher Realm

Now that the EUR/USD has reclaimed its higher realms day traders will certainly be wondering if the upside was too fast. While the trend higher should certainly be questioned, speculators should also note the bullish trajectory of the EUR/USD has merely attained values it was traversing in early June. It can legitimately be asked if the highs of the EUR/USD seen in the second and third weeks of March may now become targets for bullish traders.

• Adding suspense to the Forex picture this week is the ECB meeting and pronouncements that will come this Thursday.
• The ECB is expected to keep their Main Refinancing Rate in place, but their rhetoric regarding the decision will certainly cause a reaction.
• Yes, the unknowns regarding France's political coalition remain troubling, but again the EUR/USD is also very much under a USD centric shadow.

EUR/USD Weekly Outlook:Speculative price range for EUR/USD is 1.08400 to 1.09650

Having attained a serious amount of price velocity upwards some traders may be tempted to look for reversals lower, but they should be careful. If behavioral sentiment in financial institutions remains rather optimistic the U.S Federal Reserve is going to have to become more dovish than had been anticipated only a couple of weeks ago, the EUR/USD could continue to find buyers.

The currency pair has been volatile over the mid-term and this characteristic may not be about to disappear suddenly. Trading in the EUR/USD should be watched early this week to see if the 1.09000 level can be sustained, if the currency pair does continue to show ability to remain within its higher elements early this week, there may be a temptation to believe higher values will develop as the week progresses.

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