EURUSD Outlook & Technical Analysis for US Binary Options
The Euro shows strength against the Greenback on Nadex.com terminals after a series of bearish daily closing bars resulting to last week’s bearish close. This week, go on to analyze the important macroeconomic events as well as the chart patterns that dictates the trends following a top-down analysis methodology.
Eurozone Consumer Price Index (CPI)
The CPI of the Eurozone is the evaluation of the variations in the price of goods and services from the consumers’ perspective. CPI plays a leading role in measuring any changes in purchasing trends and inflation.
A reading that is greater than the forecast data reading should be considered as a positive sentiment for the EUR, while a data reading less than the expected forecast should be deemed as bearish for the currency.
As per the latest data released on October 16, the previous reading was 1.0%, while actual reading was 0.8%. The forecast data figure was 0.9%, signaling a slightly positive inclination for the Euro.
United Stated GDP
The Gross Domestic Product is the estimation of the yearly change in the value of all goods and services generated by the US economy adjusted by inflation, a leading indicator in determining economic well-being.
If the actual data reading is equal to the forecast reading, it is considered as positive for the currency.
As per the latest data released on September 26, the previous, actual, and forecast figures were 2.0%, signaling a positive outlook for the USD.
EURUSD Technical Analysis
EURUSD Long term Projection: Bearish and consolidating
The EURUSD closed bearish last week upon entering the MA-50 resistance area, showing signs of a price correction.
Despite last week’s price decline, the Euro continues to show strength against the USD in the new week. Let’s move on to see the dominant patterns on the lower time frames.
EURUSD Medium Term Projections: Bullish
Last week’s 0.95% consecutive bearish bars may be slowing a bit this week with the EURUSD signaling a bull-trap candlestick pattern on Monday 28, after entering the MA-50 support zone.
The Euro and USD as major currencies, and most liquid pair on top forex exchange sites shows an increase in bullish optimism as we advance further into the week.
The 4hour time frame is best for scalping the market, signaling a collapse of support on October 21 17:00 and a bull-trap on October 24 05:00. A high probability bullish support setup at 1.10762 on October 28 01:00 stops the sudden price decline in its tracks on October 29 05:00, and sent the pair breaking through the significant resistance at 1.11067.
The pair trades below the MA-50 resistance zone at publication time. A break above this level will indicate further price increase.
From the 1hour intraday chart view, the price increase at the early part of the week was triggered by a breakout of resistance on October 27 22:00, before the hidden bearish divergence and sell pressure on October 28 22:00.
The best way to trade this time frame is to get in on an entry and get out quickly, a day traders code. The price decline ended after a bullish engulfing pattern on October 29 05:00.
While putting this post together, the intraday H1 time frame signals a breakout of resistance 1.11104 on October 29 18:00. So, we may be looking at further rise in the EURUSD.