EURUSD Weekly Outlook – August 12 2021

Last Updated on August 13, 2021

EURUSD Outlook – August 12, 2021

Introduction

US binary options brokers are seeking out positions for a directional bias as the price is heading towards a key zone on the platform. If the zone should fall to the Bears, we are going to see a strong EURUSD bearish rally. 

The DXY has been showing a strong dollar for the past few days and we expect the momentum to continue. The US infrastructure bill is another factor that will strengthen the US economy as the US senators approve the bill.

EURO and US News

German Zentrum Europaische Wirtschaftsforschung (ZEW) Economic Sentiment

We base the report on the research carried out among 300 German institutional investors and analysts who rates business conditions in terms of production, supply, and economic outlook for Germany in the next 6 months. Their sentiment is a direction for the economic activities in the future that will help in the areas of growth and development in Germany.

If the level of diffusion index is above 0.0, it shows good optimism in the economy, while the figure below shows pessimism.

 The forecast for the German ZEW is 54.9, while the previous was 63.3 If the actual data is higher than the forecast, it is good for the currency but a lower outcome is not suitable for the currency.

USA PRODUCER PRICE INDEX

The survey is a leading indicator among consumers to find out consumer inflation in the economy. When the producers of either goods or services charge more, it is passed to the consumer. They release this report 13 days into the new month as PPI for Final demand. 

If the outcome is greater than the forecast, it is good for the US dollar, but if it is lower; it is not suitable for the U.S dollar. The forecasted data is 0.6% while the previous outcome came out as 1.0%.

EURUSD Technical Analysis

EUR vs. USD Monthly Chart Overview: Bearish Swing from resistance Zone

EURUSD monthly chart - 12th August 2021

Monthly Resistance Levels 1.18599, 1.19184, 1.19860

Monthly Support Levels 1.17012, 1.16011, 1.17511

The August candle started the month with a strong bearish run, rejecting the bull’s advancement when the price rose to the high of 1.19184 levels. The zone had sell limit orders which trigger the bearish rush after the US data favors a strong US dollar and a recovery economy. If the momentum of sellers should increase, we may see the price breaking the monthly low of July.

The support zone of 1.17012 is under threat as the pressure for a breakout below is eminent. However, if the zone is strong, we may see the long position traders push the pair back up, but it does not we shall see the price hit the 1.16011 levels.

Weekly Chart Bullish

EURUSD weekly chart - 12th August 2021

Weekly Resistance Level: 1.19125, 1.19788

Weekly Support Level: 1.17564, 1.17012

The Selling pressure on the pair has made the buying momentum to be weak as the buyers could not close above the 1.19739 high for some weeks. The sellers have been short on the currency because of the strength of the U.S dollar. If the economic situations continue to improve on the home front, we shall see it closes lower than the 1.16026 zones.

The COVID-19 outbreak is still on the increase in some parts of the USA. A large number of big bikes riders are gathering for a rally and they plan to travel in groups. Many will come from different states and some from abroad just for bike rider rallies. The gathering is likely to have thousands of bike riders. In this recent time that the COVID19 infection rate is infecting people more people, there is concern about the side effect of the movement.

In Florida, schools are reopening soon and the state authorities are advising schools to make mask-wearing mandatory, but some individuals are against introducing the mask, which will probably increase the infection rate if safety measures are not complied with. 

Daily Chart Projections: Bullish, 

Daily Resistance Level: 1.19762, 1.18947, 1.19126.

Daily Support Level:  1.17010, 1.17515, 1.18468.

After days of trading in a bullish direction, the pair could not close above the resistance zone of 1.19126, which kept rejecting the bull’s advancements. The zone was a turning point for the US dollars as the Bears push back the price towards the support level the pair rose from. 

The psychological zone for the traders and forex broker is the 1.17010 level for a breakout below, which will confirm the continuation of a downtrend or we see a bullish rally from the zone.

Bullish Scenario:

The support zone of the pair is the position that may attract buyers if they can turn the zone into their favor on the daily chart. Eyes will be on the 1.17010 levels as traders will wait for the best opportunity from the support zone.

Bearish Scenario:

The daily chart still favors a downtrend, having seen prices breaking below some levels. The 1.17010 is a psychological point for bear traders and if the EURUSD price closes lower, we shall see traders take the price to the new support.

Conclusion and Weekly Price Objectives

The US senators reached an agreement to pass the president’s bill of the infrastructure of $1 Trillion to build, develop and rebuild some of the major infrastructures. This will create jobs, attract investors and strengthen the US dollar.

There is a possibility for the US dollar to continue the downtrend with the recent feeds from the US economy showing a stronger recovery process.

James S. Martin
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