Last Updated on October 8, 2020
EURUSD Outlook & Technical Analysis
The VideForex traders will be paying attention to the week’s economic calendar because the outcome of reports will help investors and traders know what to do.
Traders will be on the lookout on reports from Walmart 2nd quarter retail sales. It has a way of influencing the market, and it is a good indication of the purchasing power of individuals and the economy.
Euro Zone Fundamentals
The Euro zones are paying close attention to the Flash Euro Zone PMIs.
Germans Manufacturing Purchasing Managers’ Index (PMI) shows the measured activities of the purchasing managers in the manufacturing plant or sectors.
An outcome of the index above the 50 reading means that there is an expansion in the system, and a lower reading below 50 shows contraction in the economy.
The outcome of the data is an excellent guide to the Europeans as the results show the state of the primary currency.
The output of both service sectors and manufacturing sectors will help investors and traders know the euro zones’ overall economic health.
The United States Initial Jobless Claims:
The last release of the weekly jobless claims shows that the number of unemployed individuals is reducing as a result of improvement in some sectors of the economy.
The data from the Department of Labor on the number of individuals who applied for unemployment insurance programs for the first time in the last week shows the major economy’s recovery process and progress.
However, a higher outcome than the forecast is not suitable for the U.S. dollar, while a reading that is lower than the forecast is good for the major currencies.
The forecast reading is 925K, while the previous data was 963K.
EUR vs. USD Long-term Objective: Bearish Bottoming
EURUSD Technical Analysis
Monthly Resistance Levels: 1.14950, 1.15698, 1.18523, 11.21545, 1.25558
Monthly Support Levels: 1.10292, 1.08288, 1.06359
It will interest the trading brokers to note that the July Candle closed with a strong bullish momentum closing above the resistance level of 1.15698, 02 March 2020.
This move will attract more buyers, investors, and other institutions to have open positions to go long. Price is currently at the resistance zone of 1.18523 of 02 June 2018, a close above the zone will attract more open position towards the upside of 1.2145 while a correction will take price back to the previous level of resistance turned support at 1.15698.
Weekly Chart Bullish
Weekly Resistance Levels: 1.14222, 1.14963, 1.19207
Weekly Support Levels: 1.11726, 1.12430, 1.14963, 1.16959
Looking at the major currencies, we can see that the Euro gain against the U.S. dollar started its uptrend from the low of 1.08968 after an engulfing candlestick showed a bullish momentum.
The market pulled back before another rally started with a bullish accumulation on the support zone of 1.12430, taking EURUSD to a higher high breaking through the resistance level of 1.14963.
The double bullish accumulation of support at 1.16959 of 03 August 2020 pushed the price up to close the week in again.
As the new week candle starts, the bulls will push the price to close above the resistance level of 1.19207; however, if they fail to surge higher, we might see the bears pushing back the price to the support levels of 1.16959 and 1.14963.
EURUSD Mid-Term Projections: Bullish Trending
Daily Resistance Level: 1.14226, 1.13406, 1.19163
Daily Support Level: 1.11681, 1.15403, 1.17969
The bullish surge of EURUSD is on the rest, having taken out the 10 June 2020 level of 1.14226 resistances. For some days, the major currency has been in a range between 1.18180 and 1.19163 levels.
As the new week starts and we see a bullish close above the resistance level, it means that the bulls are continuing the uptrend.
However, if the bulls rally is taking out at that zone, we may see price heading back to the support level of 1.18180, a possible break below will push back price to the lower low of 1.15403.
H4 Resistance Level: 1.18880, 1.19051
H4 Support Levels: 1.15796 1.17814, 1.16940, 1.17649
The EURUSD price is in a tight range on the four hourly charts as the price could not break out above to continue the earlier uptrend, and the price could not break below to have a reversal of the trend.
A close over this resistance level of 1.18880 1.19051 will give an upward trend in the coming days.
It is a bullish scenario from the daily and weekly time frames resulting from the U.S. dollar’s poor currency performance in the financial market and the internal differences affecting the country’s monetary policies.
The EURUSD needs to be at a secure supply zone before seeing any possible rejection of price to the downside. On the 4-hour time frame, we need to see a close below the support levels of 1.17814 and 1.16940 for a bearish surge.
Conclusion and Weekly Price Objectives
The Euro strengthens not just against the USD, but the Great British pound too amid the COVID-19 pandemic. If the support levels hold on the weekly time view, we should see a further gain in the price of the Euro against the Greenback.
Market participants are concern with the US-China trade talks and how they intend to come into an agreement. Trading brokers are also concern about the anticipated new round of stimulus that is still at deadlock among the congress.
If the weekly resistance level is reliable, we may see a rejection of the price for a correction of the uptrend before another swing higher than the resistance zone.