EUR/USD Weekly Outlook – December 8, 2020

Last Updated on December 8, 2020

EURUSD Forex Forecast


It’s been an upward price surge since the bulls confirmed an end to the prolonged bearish trend that lasted from April 2018 to May 2020. The pair has closed bullish for three consecutive weeks in a row now.

Should we expect recent Brexit events and an extended coronavirus impact to change the current uptrend? We take to the charts on popular US binary options platforms for insights into the technical and fundamental events.


This week’s important news in the headlines shows a rise in fear towards a December 31 no-trade Brexit, which leads to the UK leaving the EU.

Speculations around ECB announcements on stimulus this week weighed down the yield on Germany’s 10-year bond by -0.58%.

US News

A dual-party group of lawmakers in the US Congress gathered on Friday to deliver fresh talks on coronavirus relief aimed at a $908 billion bill.

Also, there are expectations that the Fed may make more adjustments towards quantitative easing towards the end of this month, Q4 2020.

The momentum loss points to a prolonged recovery of the US labour market from the impact of COVID-19. Analysts Lee Hardman of MUFG stressed that this would mount pressure on the Fed and Congress towards the extra stimulus.

Lastly, the US Friday job data reflected an increase in non-farm payroll NFP by 245,000, showing a slowing in job recovery rate.

EURUSD Long-term Objective: Bullish

EURUSD Technical Analysis

Monthly Chart

EURUSD Monthly Chart - December 7 2020

The EURUSD exchange rate hit the March 2018 resistance area (1.25558 – 1.21545) after finally breaking the 1.18808 bearish-Acc resistance and starts a correction following rising tensions from Brexit and US/China trade wars.

The Euro already shows dominance against the GBP since November 26 2020, as it signaled a double bullish-Acc setup.

We should consider the 1.25558 – 1.21545 zone as a take profit area in the current bull market.

Weekly Chart Bullish

EURUSD Weekly Chart - December 7 2020

Upon exiting the ten weekly and twenty weekly Moving Average areas on November 02, 2020, the EURUSD was set for a price surge.

A massive sell-off in the USD, as revealed on the USD INDEX chart together with heightened uncertainties with Brexit, brings a quick recovery to the Euro.

Daily Chart Projections: Bullish

EURUSD Daily Chart - December 7 2020

Daily Resistance Level: 1.19188

Daily Support Level: 1.16009, 1.17445

On Monday, December 07, 2020, the EURUSD slumped by roughly -0.38% but quickly recovered from the dips, aiming for December 04, 2020, high (1.21776).

Again, if the exchange rate dips below the 1.20380 MA-10 support, we may consider scaling into the daily-TF uptrend.

H4 Chart

EURUSD H4 Chart - December 7 2020

H4 Resistance Level: 1.18907

H4 Support Levels: 1.18144

The lower H4-TF better reveals the sharp price slump at the early hours of Monday 07, 2020. We may expect a continuation of the bullish trend now that the exchange rate trades above the MA-10 at the time of writing.

Bullish Scenario:

A good bearish outlook on the US Dollar Index gives more confidence towards a bullish EURUSD because it’s the most liquid currency pair.

The %K and %D also hovering above the overbought area reinforces the bullish narrative towards the 2018 all-time high of 1.25378.

Bearish Scenario:

Although our analysis leans more towards a bullish bias, we may expect bearish intraday swings for short term scalping ideas.

Conclusion and Weekly Price Objectives

Although this is not a recommendation to buy or sell the EURUSD, we maintain a bullish bias toward the pair and consider the H4-TF bullish trend for the week.

The current corrective state of the H4-TF is excellent to enter a long position. However, such trades should be taken with sound risk and money management.


James S. Martin
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