EUR/USD – Weekly Outlook- May 17 2019

EUR/USD Outlook & Technical Analysis for Binary Options Brokers

Introduction

Swing traders are having a swell time as the daily charts of the EURUSD presents opportunities to trade in both up and down price swings. Come along as we look into some interesting price patterns, as well as fundamental events setting the pace for the EURUSD.

Fundamentals

EURO NEWS

Gross Domestic Product (GDP)

Issued by the Eurostat, the GDP measures the health and economic activities in the Eurozone. A thriving trend normally has a decisive impression on the EUR, where a falling trend is regarded as negative (or bearish).

The previous gross domestic product was 0.4%, the consensus stands at the same 4.0% and a current GDP was released on 15th May at 9:00 GMT+2. 

USD NEWS

Housing Starts

The Department of Commerce, US Census Bureau issued the building permits, which tracks how many new single-family homes or buildings were built. The previously owned units of 1.139, a consensus of 1.215 and the current housing start will be released on May 16 12:30 GMT. For the study, each house and each separate quarter are counted as one housing start. The figures include all private and publicly owned units. It reveals the changes in the US housing market. Normally, a high value forecasts positive (or bullish) for the USD, while a low value is seen as negative (or bearish).

Technical

EUR/USD: Daily Chart

EUR/USD Daily chart - May 17 2019

Let’s continue with the daily chart, where the foreign exchange of the EUR/USD entered into a descending channel with peaks at 1.13239, and 1.12636. 

The channels’ lower bound (trend line) is built from a bullish hidden divergence confirmed by the MACD golden cross on May 01 2019, while the upper bound (trend line) is built from an increase in selling pressure, shown as a failure of buying pressure on April 16 2019 and May 15 2019.

Following the recent collapse of buying activity which transitions into an accumulation of sellers on May 15, the EURUSD maintains a bearish outlook from the daily chart perspective.

EURUSD: 4HR Chart

The 4hour time frame reveals a section of the descending channel mentioned earlier on the daily chart.

The increased selling pressure indicated as a dark cloud cover on May 01 2019 forced the price crashing south for another 0.53%.

A breakout of selling resistance on May 03 2019 signaled an early entry for the bullish divergence setup on the daily time frame, as price gently ascends in a bullish trajectory.

On May 13 2019 08:00, a Railway-Track candle formation was flagged, and in combination with a dead cross of the MACD, led to a price decline.

Euro to USD: 1HR Chart

Going way down to the 1hour intraday chart, a bearish regular divergence setup was confirmed by a dead cross of the MACD oscillator and consequently leading to a price drop of 0.66%.

Try attaching an RSI oscillator to the above 1hour chart and you’ll notice an intraday oversold setup at the same time as the bullish accumulation pattern on May 15 ’19 09:00.

The temporary bullish entry point on May 15 was not sufficient to drive the price of our major currencies of focus beyond 0.16%, as it later crashed by 0.45% after the RSI crossed the Mid-level-50. 

Conclusion

From a weekly chart view of the EUR/USD, a bullish divergence (MACD) is the only obstacle in the path of the strengthening of the USD as the RSI also hovers above the 30 level.

The increased selling pressure on the monthly chart which identified as a collapse of buying pressure on March 01 2019 and continuous selling pressure on April 01 ’19. This implies a bearish Q2.

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