EURUSD Weekly Outlook – March 25 , 2021

Last Updated on March 25, 2021

EURUSD Outlook

Introduction

The EURUSD pair is relatively quiet as investors, traders, and other forex brokers such as Pocket Option are kin to know the outcome of the various meetings that would be taking place both in the European zones and in the United States. 

It will highlight their view on the health of the economy and its handling of the third covid19 wave.

EURO and U.S. News

The heads of state’s upcoming meeting representing the European Union countries will be of interest to the traders, investors, and other trade partners. It aims to strengthen the international role of the Euro in the future.

German Flash Manufacturing PMI 

The Purchasing Managers Index release is a leading indicator for the economy’s status as businesses react faster to the market conditions; this gives purchasing managers have a better insight into the company’s view of the economy. 

Any reading above 50.0 is an expansion in the industry, but the below figure indicates contraction. 

The survey was carried out with about 800 purchasing managers to rate employment, new orders, prices, supplier deliveries, production, among other factors.

The forecast is 60.4, while the previous data was 60.7. An actual result greater than forecast will be good for the Euro, while the below data will be a bearish move for the currency.

U.S. Goods Trade Balance

Earlier this year, the dollar index gained about 2.3% as investors and institutional traders know how the government responded quickly to the rollout of the covid19 vaccines and their accessibility. Also, in terms of the stimulus package to boost the U.S. economy. 

The Goods Trade Balance shows the level of relationship between the foreigners and the domestic products, thereby influencing the price of goods. The data looks out for the differences in value between the imported goods and the exported goods within a certain period.

If the released report is greater than the expected data, it is suitable for the country’s currency, while the below result will affect the US dollar currency. The forecast is -85.5B, while the previous data was-83.7B.

The EUR vs. USD Long-term Overview: Bullish Swing in resistance Zone

EURUSD Technical Analysis

Monthly Chart

EURUSD Monthly Chart - 22nd March 2021

Monthly Resistances 1.25559

Monthly Supports 1.19348, 1.14950, 1.10291

The third wave of covid19 pandemic is another factor affecting the Euro and other European countries. The German Chancellor Angela Merkel urges her citizens to stay at home during the Easter break to curtail the virus’s spread. 

The EURUSD pair is likely to end the first quarter of the year in a bearish mode as the U.S. dollar increases in strength gradually. A close below the 1.19348 level will drop to the 1.14950 support level that was previously a resistance zone. 

However, the 1.19348 zones can become a support level if the bears fail to dominate the market, thereby inviting the bulls to take over the zone to retest the high of the year 2021. 

Weekly Chart Bullish

EURUSD weekly Chart - 22nd March 2021

Weekly Resistance Level: 1.23497

Weekly Support Level: 1.19521, 1.18356

On your weekly chart, you can see that the candles have been relatively quiet for three weeks due to the events happening around the Euro zones and the United States of America regarding the covid19 third waves, FOMC, ECB, and the covid19 vaccinees.

The signal line on the indicator shows that the price of EURUSD has entered the oversold region, so we expect the price to go up from that zone. If the Bulls are stronger, we shall see price retest the high of 1.23497. 

However, nothing is inevitable in the market because different forces can cause the price to close lower, and the Bears can push down the price to the low of 1.18356 and beyond or go the opposite way.

EURUSD Daily Chart Time frame Projections: Bearish 

EURUSD Daily Chart - 22nd March 2021

Daily Resistance Level: 1.21896, 1.21801, 1.21695, 1.23495

Daily Support Level: 1.20230, 1.19521

The Breaking down of the Bullish accumulation of the support level as of 26 February 2021 indicated that the U.S. dollar was more substantial as the economy stimulation package that was passed also helped the dollar gain momentum.

If the bulls can close above the 1.19521 levels, we expect the price to rise to the 1.21896 resistance level, but a close below the 1.18359 level will attract more traders to open a short position.

Bullish Scenario:

A possible bullish scenario can come to play on the daily time frame if the support zone of 1.18359 can hold for a bounce to the EURUSD pair’s upside. 

Bearish Scenario:

The bearish trend is at play on the weekly timeframe of the EURUSD pair. The down trend should continue at the break down of the support level of 1.19521 by the Bears as the U.S. dollar gets stronger.

Conclusion and Weekly Price Objectives

The EURUSD pair has not been trending in the past weeks as investors and traders await the testimony of Powell, Treasury Secretary Janet Yellen, and other members of FOMC on their plans for rising yields that will influence the future direction of the US dollar.

Similarly, the ECB is more interested in the rise in yields and may not tighten the monetary policy like that of the United States. 

The market may be unpredictable and unstable for the week as both currencies are subject to the various ECB meetings and Powell’s testimony. Therefore, it is advisable for forex brokers and other market participants to stay safe and wait for the market to decide its direction.

James S. Martin
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