EURUSD – Weekly Outlook- 3 October 2019

EURUSD Outlook & Technical Analysis for US Binary Options

Introduction

The EURUSD has been in a substantial bearish trend on both Forex and US binary options broker platforms, knocking out significant support levels. In this post, we’ll be identifying and analyzing the technical and fundamental drivers of the EUR vs. USD. 

Fundamentals

Eurozone Consumer Price Index (CPI) 

The Eurozone CPI, which is a leading indicator in evaluating the variations in purchasing sentiments and inflation, is a measure of the change in the value of goods and services from the consumer’s perspective.

When the reading is greater than expected, it is considered a positive trend for the EUR. When the value is lower than expected, it is regarded as a negative trend for the EUR.

Latest data released September 18 reveals the actual, actual, and forecast reading to be 1.0%, hinting at a bullish trend for the Rupee.

U.S Institute of Supply Management Non-Manufacturing Purchasing Managers Index (PMI)

The ISM Non-Manufacturing PMI is an indicator used in calculating the overall economic condition for the non-manufacturing sector.

The compound index is defined by the diffusion indexes of indices with identical weights. These indicators constitute Business Activity, New Orders, Employment— all seasonally modified—and Supplier Distributions.

A reading above 50% implies that the non-industrial sector economy is on the rise; a positive/bullish sentiment for the USD. A reading of less than 50% indicates that it is shrinking.

Latest data released on September 03, shows actual reading to be 49.1% while the previous data was 51.2%. The forecast reading was 51.1%, signaling a bullish sentiment for the USD.

EURUSD Technical

EURUSD Long term Projection: Bearish 

EURUSD: Monthly Chart

EURUSD Monthly chart - October 3 2019

The US dollar continues to dominate the Euro since the price plunge on April 02 ’18. Notice how the foreign exchange of the two major currencies setup longer lower-shadows upon entering the MA-50 zone, the resistance levels at 1.18522 and 1.15703 finally forced the price below the MA-50.

A failure of the significant support 1.11071 sends a shocker to the bulls as the EURUSD continues the price decline.

EURUSD: Weekly Chart

EURUSD Weekly chart - October 3 2019

After entering the MA-50 area, the EURUSD resumed the bearish trend for thirteen weeks. The most recent technical pattern is the collapse of support at 1.09268 on September 30, and setting a sound resistance level at 1.11096. We may be heading into another bearish impulse wave.

EURUSD Medium Term Projections: Bearish 

EURUSD: Daily Chart

EURUSD Daily chart - October 3 2019

The most liquid pair is in a bearish trend, as it trades under the 50-day Moving Average, using it as resistance to fuel the bearish descent. The pair established lower peaks on July 16, August 07 and September 16, after a rejection of bullish supports.

EURUSD: 4HR Chart

Just like the daily time frame, the 4hour chart is also in a bearish trend forming higher highs on September 20 25, and 30. The RSI oversold area is excellent for exiting a short position.

Conclusion

The current state of the EURUSD favors mid-term swing trading compared to long term short selling, which is not to say that we cannot enter a long term sell order. The point is, we have to time the monthly peak and our holding time when short-selling the monthly time frame, which may not be for long as the pair is overextended.

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