EUR/USD Weekly Outlook & Technical – August 11 2020

EUR/USD Outlook & Technical Analysis

Introduction

The European market is still on the high, having gained so much against the dollar as seen on Us binary options brokers. EUR/USD Investors are still monitoring the US-China trade war and the failed agreement between the lawmakers on the coronavirus relief package.

Euro Zone Fundamentals

German Final CPI m/m

Forecast data is -0.5%, and the previous is -0.5%.

Form the European zones, the German CPI is used to know the changes in price for services and products purchased by individuals. 

The most impactful among the two versions of CPI (the preliminary and the Final) is initial. It is the earliest CPI that has compelling reading. 

When the actual result is higher than forecast, it is suitable for the major currencies.

U.S. Fundamentals

The recent news on the job data that saw an increase helped ease the worries of trading brokers, investors, and other institutions after the crisis affecting the U.S. currencies made it drop for seven straight weeks.

Unemployment Claims

Forecast 1200K while the previous is 1186K 

Consumer spending is highly correlated with the data of unemployment claims, and it is also essential for those in the monetary policy.

Suppose the number of individuals who file for the unemployment insurance scheme for the first time is lower than last week’s previous data. In that case, it will mean that the economy is recovering gradually.

If the actual is lower than the forecast, it is suitable for the U.S. dollar, but if it is higher than the estimate, it is not ideal for the currencies.

EUR vs. USD Long-term Objective: Bearish Bottoming 

EUR/USD Technical Analysis

Monthly Chart

EUR/USD outlook - monthly chart - August 11 2020

Monthly Resistance: 1.15698, 1.18523, 1.21545, 1.25558

Monthly Support: 1.10292, 1.08288, 1.06359, 1.03402

The close of July 2020, the Euro gained about 6.65% against the dollar, by closing above the 1.15698 resistance level with a strong bullish candle.

The new month may likely take the price up to the level of 1.21545 in the coming month should the Bulls continue to dominate the trend.

The support zones of 2017 did have long orders in that area because of the previous price action, which led to the bull’s surge.

Euro needs to close above the high resistance if it must continue the upward trend with strong momentum. 

The resistance level that may attract sellers into the market is at the 1.21545 and 1.25558 levels because those zones have previously rejected the bullish rally in the past around February and March 2018.

Weekly Chart Bullish

EUR/USD outlook - Weekly chart - August 11 2020

Weekly Resistance: 1.199207, 1.14963, 1.14222

Weekly Support: 1.16959, 1.12430, 1.11726, 1.08968,108965, 1.07666, 1.07197, 1.06361

From the weekly time frame, you can see that the bears’ failure to successfully push back the bulls run from the 1.1493 and 1.14222 resistance levels gave way for the bulls’ momentum surge above the resistance levels.

The Bullish Accumulation built at the support zones of 1.11726 and 1.12430 was sustained, kept, and it was able to take out the resistance with a strong bullish marabuzu candle.

However, last week’s candle closes as a Doji, which may imply a pause in the bullish trend or a likely reversal in the market. It will be better for the online traders to wait for a clear direction.

EUR/USD Mid-Term Projections: Bullish Trending

Daily Chart

EUR/USD outlook - Daily chart - August 11 2020

Daily Resistance Level: 1.13406, 1.14226, 1.7969, 1.18180. 1.19163 

Daily Support Level: 1.11681, 1.15403, 1.16960

In our previous report, we noted the golden cross of 50 and 200 moving average crosses, and the market reacted in that direction of the trend after the cross.

We can see that the bulls are in total control of the market and have taken out the 1.14226 and 1.13406 resistance levels to become a support in the future before it meets another resistance on the 2nd August 2020 1.19163. 

A close above the zone will take the price up the more, but a failure will push back EURUSD to the 1.16960 support. 

The trend may enter into a corrective stage in the coming days if the bearish engulfing candle has enough momentum to push back the bulls surge to 1.15403 levels.

H4 Chart

H4 Resistance Level: 1.18880, 1.19051

H4 Support Levels: 1.16940, 1.17288, 1.17649 

EUR/USD pair is in a range between the support zone of 1.17288 and the resistance zone of 1.19051 on the H4 time frame.

The support area where the major currencies are at the time of this report may attract buyers to take the price up to the resistance zones. 

However, if the bear’s momentum should push the pair price lower with a close below the support zone will attract more sellers into the market.

Bullish Scenario:

The EUR/USD pair is an uptrend on the general scenario based on the time frames having broken through the significant resistance on the daily timeframes.  

Bearish Scenario:

There may be a bearish scenario in this new week because of the bullish momentum’s weakness based on the H4 time frame. If the bears can close below the support level, we shall get a correction of a trend.

Conclusion and Weekly Price Objectives

The trader will have to see where the primary currency’s breakout will lead us to in the coming week because the weekly candle closed as an indication candle, and we have a ranging H4 time frame.

Traders should allow prices to have a clear direction for a wise and better trading decision.

The COVID-19 cases in the Eurozone are on the rise but not as escalating as Americans and other parts of America. The Euro stimulus package has played an essential role in the market.

 

James is based in London ( United Kingdom )
He has been a professional trader for over 5 years.
Currently, he works as forex analyst for different investment companies, and also the main author at USBinaryOptions.com
James S. Martin

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