EUR/USD Weekly Outlook – February 11, 2021

Last Updated on February 11, 2021

EURUSD Forex Forecast

Introduction

On Tuesday this week, global equity indexes recorded little changes as Bitcoin BTC, the number one crypto-asset, smashed through the 42K resistance and set a new all-time high following a massive move by Tesla TSLA to buy 1.5 Billion USD worth of BTC.

The Greenback starts to give up most of its gains from early this month, and we see a stronger Euro on Forex trading broker platforms.

Can the bulls sustain the up move of the EURUSD? Find out more on the technical and fundamental events driving the EURUSD exchange rate.

EURO and US News

The MSCI, which gauges stocks across the globe, was slightly on the increase while the S&P 500 maintained a flat outlook at noon, New York session after setting a new record high.

Investors wait patiently for more news on the proposed 1.9 trillion USD stimulus package by the President Joe Biden administration, while ex-President Donald Trump is expected to face trial on inciting the US Capitol last month will make Trump the first US president to face Senate trial.

There’s also reported growth in corporate earning, a positive outlook on fiscal and monetary support on the part of policymakers, and chances that speedy dispense of COVID19 vaccines could speed up global economic recovery.

However, there are concerns over the speed of vaccination and its effects on the coronavirus’s recent variants and the negative impact on economies.

The DJI- Dow Jones Industrial Average climbed by 0.12% to trade at 31422.94, while the SPX- S&P 500 dipped by 0.01%, trading at 3915.31. The IXIC Nasdaq Composite also increased by 0.22% to trade at 14018.06.

In Europe, the STOXX 600 index, like the S&P 500, dipped by 0.09%, and the IACWI MSCI, which gauges global stocks, increased by 0.26%.

EUR vs. USD Long-term Overview: Slowing Bullish Swing

EURUSD: Technical Analysis

Monthly Chart

EURUSD monthly chart (TradingView) - 11th Feb 2021

Although the EUR vs. US Dollar exchange rate now trades above the February opening price, it does not rule out that the bears are entirely out of the market.

The bearish divergence is still intact, and there’s a strong chance that price would find resistance around the 1.23101 area, coupled with the fact that the pair trades within the 1.25558 and 1.21545 resistance zone set up in February and March 2018.

Weekly Chart Bullish

EURUSD weekly chart (TradingView) - 11th Feb 2021

Weekly Resistance Level: 1.2349, 1.21896

Weekly Support Level: 1.19524, 1.20114

New policies in the United States show that the EURUSD exchange rate’s recent correction may be losing steam as the pair finds support above the MA-20.

We should see a price surge to the upside if the pair can break above the MA-10, as illustrated on the above chart.

Daily Chart Projections: Bullish 

EURUSD daily chart (TradingView) - 11th Feb 2021

Daily Resistance Level: 1.21896, 1.21299

Daily Support Level: 1.20591, 1.20050, 1.18003

A view from the above daily chart confirms a bearish takeover of the EURUSD exchange rate after a series of bearish divergence patterns that lead to the price slump.

A collapse of the 1.21299 support now turned resistance showed bearish dominance forcing the major currency pair into the oversold area.

The buildup of hidden bearish divergence may signal a downtrend continuation. Let’s wait and see.

Bullish Scenario:

Following the bear trap candlestick formation, while the EURUSD traded in the oversold area, on the daily time frame, the bulls should maintain control of the market direction in short to medium term.

With the accumulation of buyers on 10 Feb, ’21, we should see the EURUSD setting new highs and look out for the 1.21896 price level as resistance.

Bearish Scenario:

As the bulls struggle to move the price beyond the 1.21896 level and the EURUSD trading within the MA10 and MA20 range, the impending hidden bearish divergence on the daily chart may resume the slump in exchange rate bringing the price towards the 1.20198 area.

Conclusion and Weekly Price Objectives

According to Imre Speitzer, a currency analyst at Westpac, easy policies will be prolonged in response to Fed Chair Jerome Powell’s speech.

He considers it unfavourable for the Greenback after the Fed Chair stated that new policy frameworks could sustain up to 2% of annual inflation before a rate hike.

With that said, we expect to see a weak USD in the long term and a growing Euro if the dispense of COVID19 vaccines can be sped up and lockdown lightened in the Eurozone.

James S. Martin
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