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Forex pairs in this Article » EUR/USD
By: DailyForex.com

The EUR has gained strength for the fifth consecutive week reaching 1.3811, an all time high in the last 6 weeks. The pair ended the week with a slight decline; closing at 1.3736. The US data released added to the positive sentiment for the US economy recovery, thus increasing bets that the FED will reduce its stimulus program.

In the upcoming week, investors will watch the FOMC committee policy meeting closely, scheduled for December 17th. In the Euro Zone, the ECB afraid to keep the rate at .25% and keep the borrowing costs low. We should expect to see an affect in the EURUSD with the following data scheduled to be released:

On Monday, Euro Zone and Germany will release the Manufacturing PMI and Services PMI for December while the US will publish the Unit Labor Costs for the 3rd quarter, but investors main concerns will be ECB President Draghi's statement.

German ZEW will be released on Tuesday and is expected to carry with it better news than last month.

The US will publish its CPI data on Wednesday. The market will react volatile to any changes between the actual data and the forecast.

On Wednesday, the anticipated FOMC policy meeting will be held. At the meeting, the officials will take decision concerning the interest rate and amount of FED stimulus, which now consists of 85 billion USD in monthly bond purchased. However, there is possibility it may be trimmed by the policy makers.

The week will end with a release of the GDP data from the US.

On a technical note, the strong support at 1.3740 has been breached, triggering stops down to 1.3721. The next support level according to the Fibonacci retracement is at 1.3700; but the

pair is likely to hold above this level if the fundamental data will continue to support a recovery in the US economy.

Support and Resistance Levels:

Resistance 1: 1.3800

Resistance 2: 1.3835

Support 1: 1.3700

Support 2: 1.3660

EURUSD Forecast 121613

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