Last Updated on October 23, 2020

EUR/USD Dollar Outlook & Technical Analysis

Introduction

Us binary options brokers will be watching the US dollar’s reaction as it shows signs of strength and how the new wave of the COVID-19 could be of threat to the European economy.

Let’s cover some fundamental events and round up by analyzing the charts of EUR/USD. Euro Zone Fundamentals

German Flash Manufacturing PMI

The survey was carried out within the manufacturing industries’ purchasing managers to rate the diffusion index levels in the sectors. A result of 50.0 and above is a sign of expansion in the sectors, while a lower figure shows contraction.

A more significant outcome above the forecast will mean a bullish trend for the Euro, while lower data will indicate a bearish bias for the currency.

The forecast is 55.0, while the previous data is 56.4.

U.S. Fundamentals

Unemployment claims

This jobless claim report is gotten from the Department of Labor in the USA; this report unveils the number of individuals filing for unemployment insurance for the first time in the previous week.

If the report is lesser than the forecast, it is suitable for the US dollar, while a higher outcome will mean a bearish move for U.S. currency.

The forecast is 860K, while the previous data was 898K.

EUR vs. USD Long-term Objective: Bullish 

EUR/USD Technical Analysis

Monthly Chart

Monthly Chart of EUR/USD - 23rd October 2020

Monthly Resistance:  1.15698, 1.20114, 1.21545

Monthly Support:   1.15698, 1.10292, 1.08288

The EURUSD pair slowed down for a while after the pair hit the resistance wall of September 2020 (1.20114 zones), having enjoyed the bullish run from the low of 1.06359 amid the coronavirus pandemic as of March 2020.

Although the pair clearly maintains a long term bullish outlook going forward, if the US dollar should regain some strength, we may see it push the price below the 1.15698 levels, which may expose the support zones of 1.10292.

Weekly Chart Bullish

Weekly Chart of EUR/USD - 23rd October 2020

Weekly Resistances: 1.19207, 1.14963

Weekly Supports: 1.16959, 1.17061, 1.14222

August 3rd, 2020, the weekly chart resistance zone has been retested, and it was met by a rejection from the 1.19207 resistance zones. The trading brokers were advised to wait for a confirmation for a bearish swing before placing orders from our previous report. 

At the close of the weekly candle, we can see a railway track candlestick formation, which indicates that the sellers have taken over the EUR/USD pair, and we expect the price to drop down to the resistance level of 1.14963 turned support.

However, the EUR/USD pair needs to close below the support level of 1.16959 for an exact reversal, but if the bears should fail, we may see the pair bounce up from the level to continue the bullish trend.

EURUSD Mid-Term Projections: Bullish Consolidating

 Daily Chart

Daily Chart of EUR/USD - 23rd October 2020

Daily Resistance Level: 1.17712, 1.19163, 1.18500

Daily Support Level: 1.16960, 1.16122

Platforms, such as BinaryCent broker,  need to observe the new week as we can see that the sellers took over the market from the buyers from the 1.18500 levels, and they are pushing the price towards the 1.16122 levels for a possible break.

If the support level of September 25th,2020,, should hold, we may see the bulls take back the market from the nearest future station.

 H4 Chart

H4 Resistance Level: 1.18282, 1.18618, 1.19175

H4 Support Levels: 1.17416, 1.16940, 1.16544, 1.16110 

From the four-hour time frame, we can see the US dollars gaining ground and pushing the price towards the 1.16544 level; a close below the level may send the EUR/USD further down.

However, if the support level can hold, we shall see the pair rise from the present level when reporting to the resistance level of 1.18282.

Bullish Scenario:

A possible bullish scenario based on the daily time frame may happen should the support level of 1.16122 holds against the bears’ pressure. If they repel the advancement, we may likely see a double bottom at that level for an uptrend.

Bearish Scenario:

The bearish scenario based on the weekly and four-hour time frames will likely continue. If we can get a close below the support levels of 1.16959, it will confirm the trend’s continuation.

Conclusion and Weekly Price Objectives

The bullish trend on the weekly chart should continue this week and into the next as we can see the railway track candlestick pattern, which will bring in more trading brokers (buyers) into the financial market.

 

James is based in London ( United Kingdom )
He has been a professional trader for over 5 years.
Currently, he works as forex analyst for different investment companies, and also the main author at USBinaryOptions.com
James S. Martin
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