EURUSD Weekly Outlook & Technical – January 10 2019

EURUSD Outlook & Technical Analysis for US Binary Options

Introduction

The EURGBP becomes a primary technical driver of volatility between the Euro and the Great British Pound, as traders look forward to the forthcoming date of Brexit on Jan 31, 2020. The U.K. election was also a significant driver of volatility as smart money moved from the EUR to the GBP on BinaryCent platform.

The United States is not only in a trade war with China but also at the brink of war with Iran following the killing of Soleimani. These events bring an increase in volatility in USD pairs.

This week, we move on to analyze the key technical levels on the EURUSD, as well as other fundamental drivers of the Euro and U.S. economies.

Fundamentals

Eurozone Consumer Price Index (CPI)

The CPI or Consumer Price Index is an evaluation of changes in the price of goods and services from the perspective of the consumer.

A higher than expected data reading suggests that the consumers are more optimistic and should be considered a positive or bullish sentiment for the currency. In contrast, however, a lower than anticipated reading is seen as a negative or bearish trend for the currency.

A positive outlook can be said to be eminent for the USD based on the latest data, which shows that the Actual and forecast reading is 1% while the previous reading was 0.7%.

U.S. Factory Orders MoM

Factory Orders index is an evaluation of the variation in the entire value of new acquisition orders lodged with producers. It is a report that also includes new data on the non-durable orders index as well as a review of the Durable Assets Orders data delivered about a week beforehand.

A higher than expected data reading suggests economic optimism and should be considered a positive or bullish sentiment for the currency. In contrast, however, a lower than anticipated reading is seen as a negative or bearish trend for the currency.

A positive outlook can be said to be eminent for the USD based on the latest data, which shows that the Actual and forecast reading is 0.3% while the previous reading was -0.8%.

EURUSD Technical Analysis

EURUSD Long term Projection: Bearish and Slowing

Monthly Chart

EURUSD Outlook - Monthly Chart - January 10 2010

The above monthly chart shows the EURUSD pair closing above a hidden bearish accumulation pattern on Dec 02, 2019, after a prolonged eighteen months bearish trend.

We expect a further increase in the forex exchange of the two most traded major currencies across broker and exchange terminals.

Failure of the 1.08848 support signals an increase in demand for the Greenback and emphasizes the weakness of the Euro.

Weekly Chart

EURUSD Outlook - Weekly Chart - January 10 2010

Although the EURUSD currency pair sets a higher low on Nov 25, 2019, compared to Sep 30, 2019, low, an impending hidden bearish divergence may switch the trend direction to bearish as the pair trades near the 200-Weekly Moving Average.

EURUSD Medium-Term Projections: Bullish Correction Phase

Daily Chart

The daily time frame clearly shows the EURUSD forming higher lows, a major level being the price close above bearish resistance on Dec 26, 2019.

The USD gains against the EUR at press time, bringing the pair slightly above the 1.10663 support, with no sign of a price recovery to the upside.

4HR Chart

The MA-200 serves as strong support for the EURUSD holding the USD from further gains. A price close below the 1.11010 support should confirm more sell-off.

Conclusion

Finally, the recent dominance of the GBP through a regular bearish divergence on Sep 01, 2019, brings about a decline in the volatility of the EURUSD, and weakness of the Euro.

However, if Dec 01, 2019, pin-bar candlestick formation holds, we may see an increase in volatility for the EURUSD.

The EURUSD generally maintains a bearish outlook at press time.

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