EURUSD Weekly Outlook – April 15 , 2021

Last Updated on April 17, 2021

EURUSD Outlook

Introduction

The sudden extension of the lockdown in some parts of Europe, like German states by their authorities, will likely slow down businesses’ recovery process in the zone.

It will also interest the forex broker such as PocketOption to know that the extension is for three weeks. The German government is planning on a compulsory covid19 test to find a macro means of reducing the coronavirus’s spread.

EURO and U.S. News

Industrial Production mm

The Industrial production in Euro is accessed by the total changes in inflation-adjusted output to the value of the manufacturing companies, products, mines, and utilities. It is also released after 45 days of every month’s ends. The Utilities and the Mines take 20% of the total production while 80% is from the Manufacturing output.

The industrial production outputs is a leading indicator for the health of the economy, and it’s correlated with the consumers’ condition in terms of spending, jobs, and earnings.

A more significant outcome than the forecast is good for the currency, while a lower result than the forecast is not attractive.

The previous data was -1.8%, and the forecast is 0.5% while we await the outcome of the data.

The U.S. Core Retail Sales

The US dollar started the week on a weak note as forex brokers, investors, and other traders await the news on the U.S. inflation and retails sales data.

The US dollar’s performance reflects on the U.S. Treasury yields since the year began as the stimulus plan fuels the country’s economic rebound amid the covid19 second wave pandemic.

The core retail sales data excludes automobiles from the changes of the total value of sales it recorded. The automobile sales account for 20% of its records, and it tends to be volatile and distorting to the trend; that is why it is excluded from the core data, which is a better gauge in the spending trends.

If the actual is greater than the expected data, it is suitable for the U.S. dollar, while a piece of lower information than the forecast is not suitable for the currency.

The previous data release was -2.7%, and the forecast is 4.7% while we await the actual data to be released.

Monthly Chart Overview: Possible Hidden Bullish Divergence

EURUSD Monthly Chart - April 12

Resistance levels (Monthly): 1.23495, 1.22432

Support levels (Monthly) 1.16121, 1.17041

The bullish surge in the monthly chart is a correction for the bearish rally that gave the U.S. dollar good momentum in the market due to the positive news in the U.S. economy. 

In the U.S., most businesses have been closed down due to the covid19 infection cases until the recent development in the U.S. economy.

We expect the resistance levels to remain a solid point for the bears as they hope to reject any bullish advancement from those levels. In the meantime, we still expect some bullish runs in the weeks to come.

Weekly Chart Bullish

EURUSD Weekly Chart - April 12 2021

Resistance Levels (Weekly): 1.1990, 1.22431, 1.23497

Support Levels (Weekly): 1.16123, 1.17041

The US DXY drop about 0.2% down to 92.03 level, which affects the U.S. dollar influence in the currency market. We expect the EURUSD pair to run a bullish trend for some weeks before seeing the US dollar increases in strength. 

A surge in bullish momentum may take the price up towards the 1.23497 zones to anticipate a quiet dollar in the market.

The Germanys’ recent announcement to increase the lockdown by three weeks will likely weaken the Euro currency in the market. If the U.S. dollar should gain strength, we may see it surge to close below the support level of 1.17041 for another bearish rally.

Daily Chart Projections: Hidden Bearish Divergence 

Resistance Level:s (Daily) 1.23496, 1.21896, 1.199

Support Levels (Daily): 1.17042, 1.18672

The bullish rally on the daily time frame may not live long as we see that the 1.21896 zones are resisting the earlier surge. We need the EURUSD price to close above the levels if we need to see another bullish trend. 

If the bulls should succeed, we may see it trend towards the 1.21896 resistance levels of the currency pair.

At the time of the report, the current price level indicates that the price is struggling to pass through the resistance level of 1.19521, and if the bears can take over, we may see the price drop down to the 1.17041 levels.

Bullish Scenario:

The weekly time frame Candle shows a solid bullish engulfing candle at the support zone, which will likely support the bulls rally for the week ahead.

Bearish Scenario:

The EURUSD weekly time frame is a bearish setup, and the trend is likely to continue after the retest of the resistance levels of 1.123497 before we see the continuation of the bearish trend.

Conclusion and Weekly Price Objectives

The Euro-zones started the year with another second wave of covid19 due to an increase in infected persons. The virus’s outbreak and poor distribution of vaccines within the zones is another challenge they are facing.  

Americans have inoculated above 35% adults compared to 15 % of the Europeans. They are having a faster-recovering process, which is significant to the economy. 

According to Fed Chair Jerome Powell, the U.S. economy is growing much quicker even though the coronavirus remained a threat.

The EURUSD pair is bullish for this week as we expect the trend to go up for some days before we see another bearish rally from the high of 1.123497.

 

James S. Martin
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