EURUSD Weekly Outlook – June 5, 2021

Last Updated on September 19, 2022

EURUSD Outlook – June 5 2021

Introduction

The US binary options brokers will approach the new month with some levels of precautions as we know the week has some high-impact news on the economic calendar. The U.S dollar will be on the radar as the Non-Farm payroll will be the focal point for investors, traders and other institutions as a significant mover of USD exchange rates.

EURO and US News

German Final Manufacturing PMI

A figure above 50.0 shows industry expansion in the level of diffusion index carried out among the purchasing managers in the manufacturing industry. Over 400 purchasing managers were given the task to access the relative level of business conditions in the areas of new orders, employment, production, prices, and other things as well.

The purchasing managers hold a better view of the relevant insight and current status of their company in relation to the economic activity of the country which also serves as a leading indicator of the health of the economy.

If the forecast is lower than the outcome, it is good for the currency, but if the outcome is lower than the forecast, it is not suitable for the Euro currency. This data is usually released on the first business day of a new month. The forecast is 64.4 while the previous data was 64.4.

U.S Non-Farm Payroll

The Bureau of Labor Statistics will release the latest version of a report on the Non-Farm payroll. This will measure the changes in numbers of people with employment in the previous month while excluding the farming industry.

They usually release this report every first Friday of a new month and it comes with a high impact on the financial market. Traders are interested in the outcome because job creation is a leading indicator of consumers spending, which also states the economic health of the nation.

If the outcome is greater than the forecast, it is good for the economy and the US dollar will appreciate but if the actual is less than the forecast it will cause the currency to be bearish.

The forecast is 645K while the previous data was 266K.

EURUSD Technical Analysis

EUR vs. USD Monthly Chart Overview: Bullish Swing in resistance Zone

Monthly Resistance levels 1.25558, 1.24000

Monthly Support levels 1.10390

The US dollar has not really recovered from the COVID-19 pandemic of 2020.

The Euro has been bullish against the dollar right from the support of April 2020 (1.10390) which pushed the pair higher to the previous resistance zones of 2018 (1.2558).

As we enter a new month, we may see the EURUSD pair react differently in trend if the Bull’s momentum cannot close above the zone, we may see a reversal of trend from the resistance levels on the monthly time frame.

Weekly Chart Bullish

Weekly Resistance Level: 1.2350

Weekly Support Level: 1.2150, 1.1690 

The forex trader still expects the bullish run to continue towards the resistance levels of 1.2350 for either a close about the zones, this move will take out the previous high to create another higher high for the pair.

However, if the resistance zones reject the bull’s pressure, we are likely going to see the bears push back forcefully. As we enter a new month, we expect traders, investors and institutional forex traders to be aware of the strong fundamentals coming out of the U.S zones which will probably determine the direction of the market in this new month.

If the news should go against the expectations of the forecast, it will mean a bearish move against the US dollar but a favourable outcome will strengthen the dollar and the bears will take down the EURUSD pair for a downtrend.

Daily Chart Projections: Bullish, 

Daily Resistance Level: 1.23684, 1.22430

Daily Support Level: 1.2150, 1.19756

The reaction of forex brokers and traders around the current market price shows that the bias of the market is uncertain as they await the release of the news of Non-farm payroll  which will state the economic health of the nation.

Bullish Scenario:

The Bulls have dominated the currency pair for weeks after the U. S lost its first-quarter gains. If the bulls can break through the resistance levels, we shall see the month of June becoming a bullish month as well.

Bearish Scenario:

The bearish scenario is determined by the market sentiment at the end of the week after the high-impact news must have clarified the market sentiments. We expect the market to react at the resistance zones for a bearish swing if the bulls cannot close above it.

Conclusion and Weekly Price Objectives

As the price is approaching the psychological zone on the pair anything can happen, therefore, it is advisable for traders to take a wait and see approach towards the direction of the market through the outcome of the fundamentals releases during the trading week so that their bias is in the right direction of the market.

James S. Martin
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