EURUSD Weekly Outlook – August 6 2021

Last Updated on August 6, 2021

EURUSD Outlook – August 6, 2021

Introduction

In this new week of a new month, Race Option investors, Institutional traders, and investors will be on the watch for an improved job market outcome as the US economy and the global economy are faced with the rise of the delta variant. 

If all factors should favor the US economy, it will drive the financial market and general global economic activities.

EURO and US News

The dovish tone from the Fed chairperson and other members of the committee indicates that the tapering plan may not be nearby as expected because the economy is yet to attain the level, they expect it to operate at before stepping back from the stimulus package. 

In the new month, we have seen the US dollar showing signs of strength as risk appetites rebuild as the infrastructure bill encourages risk-taking.

Non-farm Employment Change

The Job creation data is important for investors, traders, and online brokers because it accounts for the health of the economy in relation to consumer spending. The NFP will focus on the number of people who were employed during the previous month and this data will exclude the farming industry. 

They usually release this data during the first week of the new month. A figure that is more significant compared to the forecast is considered positive for the Greenback. However, a lower value is not shown optimism towards the currency. 

The Forecast is 895K while the previous data was 850K.

The Spanish unemployment Change

Records on the numbers of job seekers are released three days into the new month from the Spanish zone. The number of unemployed is significant because of its importance in the general health of the economy as consumer spending reflects directly on the labor market. If the total number of job seekers is more than the forecast, it is not suitable for the currency, but if the actual result is less than the expected outcome, it is good for the currency.

The previous data was -166.9K while the forecast is -115.5K, the positive outcome will be a sign for a healthy economy.

F -11.5K, P -166.9K

EURUSD Technical Analysis

Monthly Chart Objective: Down Trend Buildups 

EURUSD monthly chart - August 5 2021

 

Monthly Resistance levels 1.22664, 1.23684, 1.19097, 1.20577

Monthly Support levels 1.16005, 1.17023, 1.17552

THE EURUSD pair experienced a strong pullback from the support zone of 1.17552 as the month of July ends. The bearish candle of June still has more forex brokers with short positions. If the bull’s attempt cannot close above the 1.22664 resistance zones, we shall see the short position traders coming to play from the 1.20577 levels.

Weekly Chart Down-Trend

EURUSD weekly chart - August 5 2021

Weekly Resistance levels 1.19130, 1.197661, 1.22664

Weekly Support levels 1.17524, 1.17011

The previous week ended with the bulls having dominated the market. There is a possibility of the buyers taking the price of EURUSD high to the high of 1.22664 if their momentum is stronger to close above the recent high of 1.19130. 

However, if the short position traders can build resistance against the Bulls from the levels of 1.19130 level, we may see the price drop to close below the 1.18469 zones and a close below will take the price lower to the low of 1.17524 or lower to 1.17011.

The US authorities are not planning any lockdown measures as the COVID-19 cases increases in some part of America, especially in Florida. Social distance is being promoted and the use of a mask to reduce the spread of a new variant known as the Delta variant.

Daily Chart Projections: Downtrend 

EURUSD daily chart - August 5 2021

Daily Resistance Levels 1.19761, 1.18946, 1.19125

Daily Support levels 1.18314, 1.17011, 1.17515

The previous week has been bullish for the long position traders as they could push the price from the low of 1.17515 to close the week at the zone of 1.19125. If the long position traders above the 1.19125 levels will take the price to the high of the pair higher to 1.21154 resistance levels. 

Forex brokers will trade cautiously as they eye the non-Farm payroll event coming up in the week and which will either strengthen the US dollar or weaken it depending on the outcome of the news.

Conclusion and Weekly Price Objectives

In the USA, the COVID-19 vaccines program is on the increase as the demand intensifies for more people to be jabbed with the dose of the vaccines as the number of persons affected with the delta variant increases. 

The recent plan of some countries like the UK to allow people into the country as long as they have been vaccinated or taking the necessary COVID19 test will boost the growth of the economy, while they expect those returning without the jab to isolate their selves.

The outcome of the US fundamental will determine the next direction of the US dollar. From the weekly chart, we can see a bullish engulfed candle close from the (1.17579) telling us that the trading week will be bullish until market forces change the direction.

 

James S. Martin
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