EURUSD – Weekly Outlook- January 3 2018

EURUSD – Technical Analysis for US Binary Options

Introduction

Major currencies paired against the U.S dollar suffered a huge blow, after a bullish closing month of December. Join us as we take a look at previous and current US binary options technical and fundamental events moving the EURUSD currency pair. 

Fundamentals

United States: Markit PMI

This week, the Markit Economics released the Manufacturing PMI which is considered a leading fundamental indicator and a significant driver of the GDP. From our reference scorecard, values above 50 signify an expansion of the economy indicating a bullish sentiment for the USD, results below 50 points, on the other hand, indicates a contraction of the economy with a negative weighting on the USD. The actual result came out 53.8 which is lower than the previous 53.9. This indicates a rising but slowing economy.

Euro: Markit PMI 

Markit economics also released the Manufacturing Purchasing Managers Index (PMI) for Europe. As the manufacturing sector commands a large portion of total GDP, the manufacturing PMI is a significant pointer of market health and the overall economic form in the Euro Zone. The actual reading which came out this week was 51.4 compared to the 51.8 of the previous. This indicates bearish sentiment for the EUR.

Technical

EURUSD: Monthly Chart

EURUSD Analysis for US binary options - January 3 2019

As shown on the above monthly chart of the EURUSD foreign exchange pair, an early confirmation of the bearish hidden divergence pattern was triggered by a breakdown of hidden bullish accumulation at the closing price of the month of April 2018. Moving forward, a bearish accumulation pattern boosted shorting confidence and a dead cross of the MACD finally triggered the divergence pattern at the close of August 2018.

EURUSD: Weekly Chart

A combination of converging signals within the same time range, often offer higher confidence towards a particular trade direction. The Bearish hidden divergence pattern triggered at the closing price of April on the monthly chart, coincides with the Bearish regular divergence pattern triggered on March 15 from a weekly chart perspective. 

This combination of patterns on the monthly and weekly time frame were also supported by breakdown of bullish accumulation patterns and bearish accumulation patterns, leaving resistance levels at 1.25619 and 1.24123. 

As the bearish trend of the weekly chart showed weakness, an opposite bullish regular divergence pattern was triggered by a golden cross of the MACD indicator in combination with a bullish accumulation pattern establishing support at 1.13452. Price close below the bullish accumulation support will trigger a change in polarity and consequently a change in trend.

EURUSD: Daily Chart

From the daily chart perspective, the pair triggered a bullish regular divergence pattern on November 15 2018. Rather than push the price higher, the pair entered into a range, which eventually collapsed by the trigger of a breakdown of bullish accumulation on January 2, 2019. This breakdown pattern is an early confirmation to the bearish hidden divergence pattern in view.

EURUSD: 4HR Chart

A bearish regular divergence pattern was recently triggered on the 4hour chart, serving as an early confirmation to the bearish hidden divergence pattern on the daily chart. This pattern is suitable for Binary Cent investors trading binary options as price continued south upon confirmation by the dead cross of the MACD oscillator. This was after a short-term bullish swing on December 27.

Conclusion

At the closing price of December 2018, a bullish accumulation pattern was triggered leaving a support at 1.12695. A price close below this support level from the monthly chart perspective will confirm a continuation of the bearish trend triggered by the bearish hidden divergence of April 2. This will also nullify the bullish regular divergence of the weekly chart.

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