Last Updated on October 30, 2020

EURUSD Dollar Outlook & Technical Analysis

Introduction

Last week, the EURUSD closed bullish as the long term weekly trend kicked in after the pair entered the support region. However, this week, the Greenback slowly corrects some of the gains and even threatens to go deeper.

Should we expect a continuation of the upward movement of the EUR vs. USD on US online brokers considering that the Euro appears more substantial than the Great British pound? Let’s check the charts and touch on some news events.

Euro Zone Fundamentals

The Main Refinancing Rate

This operation is a result of the interest rate, which influences the banking operation. The decision is reached by the ECB executive board members and the governors of the Euro area central banks.  This decision is priced into the market before the ECB press conference takes place 45 minutes later.

The short-term repo rate is of interest to the retail traders and other investors because it is an essential currency valuation factor.

A higher actual result than forecast is considered suitable for the Euro currency, while a lower outcome will mean a bearish direction for Euro.

The forecast is 0.00% while the previous 0.00%

U.S. Fundamentals

Durable Goods Orders m/m 

The forecast is 0.5%, while previous data was 0.5%

The Census Bureau is responsible for releasing the durable goods orders placed with the managers or manufacturers. These durable products have more than three years of life duration, products like computers, automobiles, and appliances. 

If the numbers of purchasing orders increase, it will mean that manufacturers’ activities will expand to fill in the orders.

If the actual report released is greater than the forecast, then it favorable for the USD.

EURUSD Technical Analysis

Monthly Objective: Bullish

EURUSD monthly chart shown on October 25 2020

Monthly Resistance: 1.14950, 1.18523, 1.21545, 1.20114

Monthly Support: 1.03402, 1.08288

The EUR/USD monthly chart remains bullish, having slowed down from the bullish surge that broke above the resistance levels of 1.15698 as of 02 March 2020. The bulls must have regained some momentum as this month is coming to a close, and we may see another bullish swing above the recent resistance zones of 1.20114 for the continuation of the bullish trend.

The only hope for the bears is to hold the resistance zones and reverse the trend from the 1.20114 levels; if they can, we need to see bearish engulfing candles or other patterns from the bears at those levels on H4 or daily time frames.

Weekly Chart Bullish

EURUSD weekly chart shown on October 25 2020

Weekly Resistance: 1.20114, 1.14963, 

Weekly Support: 1.16959, 1.12430

The EUR/USD pair has been an uptrend from the 1.12430 bull’s support until the resistance of 31 August 2020, a rejection zone for the bulls.

The rejections of the price at those levels have been building a ranging market. This consolidation of price around the weekly resistance levels would mean that trading brokers will have to wait for a clear breakout either above for trend continuation or below for reversal of a trend.

THE EUR/USD Mid-Term Projections: 

Bullish Consolidating

Daily Charts

EURUSD daily chart shown on October 25 2020

Daily Resistance Levels: 1.19163,  1.19657,  1.20111,

Daily Support Level: 1.16122,  1.20111,

The daily resistance of 1.19163 and 1.19657 has been a tough nut for the bulls to crack since the levels kept rejecting the bulls’ advancement every time they approach resistance levels.

For the bulls to have their ways, they need to close above the highest resistance level of 1.19657 with a strong bullish candle.

However, the bears need to close below the support levels of 1.16122 if they need to control the market and a strong bearish candle.

H4 Chart

H4 Resistance Level: 1.18618, 1.18282, 1.19175

H4 Support Levels: 1.16544, 1.16110, 1.17416, 1.16940

The Hour-four time frame shows that the resistance levels had rejected the bullish trend before, and can it do it again as the zones are under threat?

If the bulls’ momentum gets more robust, it is possible to break above the 1.18618 levels with the recent bullish surge it had some hours ago.

USD is getting stronger; therefore, we will likely see a reaction from the bears by pushing back the EURUSD pair down towards the 1.17416 supports.

Bullish Scenario:

A general bullish scenario is at play based on the four-hour time frame. The recent run started from the support levels of 1.16940, which has pushed the pair higher into the 1.18618 resistance zones.

If we get a close above the current resistance, the EURUSD pair will go higher, and the trend continues.

Bearish Scenario:

A general bearish scenario based on the four-time frames may come in handy if the resistance levels can reject the bullish rally and overturn the zone into a bearish swing by closing below the 1.18282 levels.

Conclusion and Weekly Price Objectives

The US election cannot be overlooked because its outcome will affect both the European and American markets in the coming months and years; that is why it’s of interest to the trading broker.

James S. Martin
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