EURUSD Weekly Outlook – August 27 2021

Last Updated on August 28, 2021

EURUSD Outlook – August 27, 2021

Introduction

New months and a new week are always exciting moments for Nadex investors, traders, and forex brokers as they await strong fundamental news regarding the U.S economy which will generate trading opportunities for them. 

However, the recent news from the USA drug and food agency regarding the Pfizer vaccine approval is likely to boost the acceptance of the vaccine within the country and open up movements in some other areas of the economy.

EURO News

The German Flash Manufacturing Index.

The survey was carried out among 800 purchasing managers in the manufacturing industry within a period to rate the conditions of businesses in terms of production, suppliers, employment, prices, and inventories. An indicator is a leading tool in accessing the health of the economy. 

An indication above 50 is an expansion of businesses, but the figure below shows a contraction. However, a report that is greater than the actual is good for the currency but a lower outcome will weaken the Euro and strengthen the U.S dollar. 

The Previous outcome was 65.9 while the forecast is 65.1

US Existing Home Sales  

They excluded the newer buildings under construction from the numbers of residential buildings sold as the National Association of Realtors views their reports. The more homes that were sold are good for the economy as it will have ripple effects on the health of the economic activities in the country. However, the report is released after 20 days in the month. 

Therefore, if the data is greater than forecast, it is good for the currency but a lower report is not suitable for the currency.

The previous data on home resales was 5.87M while the forecast is 5.82M 

EURUSD Price Forecast

Monthly Chart Overview: Bullish Swing in resistance Zone

EURUSD monthly chart - 26th August 2021

Monthly Resistances: 1.25723, 1.23573, 1.22664, 1.19116

Monthly Supports 1.17100, 1.16600. 1.16001

The EURUSD pair on the monthly chart is setting up a bearish move as the bears are testing the support zones of 1.17100 and 1.16600 for a close below the levels. If the bears can take out the zone. The forex brokers previously had long positions around the zones previously which triggered the bullish run from those order blocks. If the Bears break out below the zone in the coming weeks, we shall see price dropping lower.

The psychological zone for the long position traders is the 1.16001 zone. The price is either to bounce from the zone for the bulls to push back the price of the EURUSD pair or for the Bears to close below the zone for another swing low.

Weekly Chart Bullish

EUEUSD weekly chart - 26th August 2021

Weekly Resistance Level: 1.22664, 1.18033, 1.19116

Weekly Support Level: 1.15996, 1.16632, 1.17036, 1.13000

The weekly chart of the EURUSD pair shows the bulls are struggling to push back the US dollar dominance from the support zones of 1.17036 some weeks back. The bulls have dominated the zones during the first pandemic of COVID-19, 2020. It is a psychological area for the Bulls. If the US dollar should gain strength and take out the weekly low of the 1.15996 zone, we shall see the price drop towards 1.13000.

The US Military is set to give all their personnel the COVID19 vaccine jab as the US drug and food Agency approves Pfizer COVID-19 vaccines. The President of the USA made the call and also encourage business owners to ensure that their workers are vaccinated as well.

Daily Chart Projections: Bullish, 

Daily Resistance Level: 1.19115, 1.18033

Daily Support Level: 1.17035, 1.17545, 1.16632

The bearish swing finally broke out below the low of March 31, 2021 (1.17035), after the trend builds the drive from the high of 1.22664 showing a strong US dollar momentum. The bullish divergence may take the price higher if the bulls can close above the resistance zones of the market. However, the support level of 1.17545 has become a resistance and forex brokers need to take out the zone for the price to go up.  

For the Bears to continue the downtrend, we shall expect the price to close lower than the 1.16632 zone for the bias to continue.

Bullish Scenario:

The bull’s zone of 1.17000 is under bearish pressure as they wish to close below the support levels. If the new trading week opens in their favor, we may see a rise of price from the area, should they have momentum on the daily chart.

Bearish Scenario:

The daily time frame shows that the bearish scenario is still in place as the Bulls are resisting the bears from closing below the support zones of 1.17000 on the daily chart. A failed attempt will reverse their move, but a close below will lead to the continuation of the bearish rally.

Conclusion and Weekly Price Objectives

The US dollar has made gain for some weeks in the financial market and we may continue to see the US dollar increase in strength if the support zone can be broken by the bears in the coming days. The approval of the Pfizer COVID19 vaccines is another boost for the economy as investors and forex brokers are watching how other sectors will react to the recent development.

James S. Martin
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