EURUSD Weekly Outlook – June 11 2021

Last Updated on June 10, 2021

EURUSD Outlook – June 11 2021

Introduction

Some binary options brokers such as Race Option disappointed in the payroll numbers because they had higher expectations that the data will be favourable for the US economy as the job data fell short with 90000 below expectations. Now that the disappointment is passed, investors are looking for a new direction as they wait for consumers price data this coming week.

According to Shinichiro Kadota from Barclays banks, he said that the payrolls numbers were not weak, but it had built a lot of expectation in advance before they released the news.

EURO and US News

German Industrial production Output.

The German production output dropped in numbers as of April’s report. The report includes changes in the total inflation-adjusted value of output produced by mines, manufacturers and utilities.

We observe a correlation with consumer conditions in terms of employment and earnings and the difficulties in the business cycle affect the production output. This report comes about 40 days after the month ends.

An outcome that is greater than the actual is good for the currency while an outcome that is less than the forecast is not suitable for the currency. The Actual data came out at -0.1% while the forecast was 0.3% and its previous data came out 2.2%.

The U.S. (CPI) Consumer Price Index.

The price of food and energy accounts for one-quarter of the Consumer Price Index and they are volatile because the FOMC pays attention to the core data because of the overall inflation influences it has on the market.

The CPI also focuses on the price of goods and services purchased by consumers during a particular time excluding energy and food. They release the report 16 days into the new month.

However, if the outcome is greater than the forecast, it is good for the U.S dollar while a lower outcome below the forecast is not suitable for the currency. The forecast is 0.5% while the previous data was 0.9%.

EURUSD Technical Analysis

Monthly Chart Overview: Bullish Swing in resistance Zone

EURUSD monthly chart - June 11 2021

Monthly Resistance 1.25559, 1.21689

Monthly Support 1.10391, 1.06359

The US dollar remains weak against other pairs as the year 2021 is now in its 6th month. The resistance zone is still holding as the Bulls applies more pressure into the zones for a breakout above the resistance levels. A close above will take the pair into another bullish run creating a new high for the pair.

The Bear’s psychological strength is the highest level of resistance hoping to reject the Bulls surge from those levels for a bearish rally back to the lows of 1.10391 if they can overturn the Bulls surge from the zones.

Weekly Chart Bullish

EURUSD weekly chart - June 11 2021

Weekly Resistance Level: 1.23490, 1.21660

Weekly Support Level: 1.16875, 1.08965, 1.07750 

The hidden bullish inside bar of 24th May is letting traders know that there is still a bullish momentum in the trend on the weekly time frame has seen fewer volatilities on the chart for some weeks.

The high of 1.23490 is a barrier for the Bulls having taken control of the market from the low of 1.16875. The job data was of a disappointment to the forex brokers, retailers’ traders and other finical institutions because it fell about 90000 jobs short of expectations.

However, the traders and market participants cannot find out the direction of the market until they receive certain clarifications to influence the market sentiment. If there are strong fundamental news in favour of the US dollar, we may see the EURUSD go bearish in the new week but if the news is not favourable, we may see the Bulls push the pair higher.

 Daily Chart Projections: Bullish 

EURUSD daily chart - June 11 2021

EURUSD Daily Resistance Level: 1.23496, 1.2243

Daily Support Level: 1.19756, 1.17042

On the daily chart, the trading activities have been ranging within a tight zone and volatilities have dropped for both currencies. The financial market has been affected by the COVID19 pandemic, which has led to a rise in the level of inflation in the economy of different countries.

If the Bears momentum is strong during the week, we may see them take over the market from the 1.22430 zones to push the price to the low of 1.19756. however, the US dollar has been in a tight trading range because of the events coming up on Thursday.

We shall see low volatility in the EURUSD market as the week progresses until the major events play out before we can say the market direction.

Bullish Scenario:

The bulls rally can continue if they can breakout above the psychological level of bears (1.22430) on the daily chart for the uptrend to continue.

Bearish Scenario:

A possible bearish swing may happen on the daily time frame if they can hold the resistance zones after Thursday’s events for a downtrend if the events should favour the US dollar.

Conclusion and Weekly Price Objectives

The COVID-19 pandemic really caused the financial market to tumble and many countries are still struggling with the recovery of their economy as they battle with inflation as well.

Traders and investors will have to wait for policy clues before making new bets during the trading week because the volatility will be very high at the end of the meeting in Europe and the U.S inflation data publications on Thursday.

James S. Martin
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