EUR/USD – Weekly Outlook- May 2 2019

EUR/USD Outlook & Technical Analysis for US Binary Options

Introduction

Hello friends! Major currencies came to a close this week marking an end to April and beginning of a new month. We’ll start by introducing interesting news event in the EURO and U.S as well as look forward to new technical patterns on the monthly and weekly charts of the EUR/USD.

Fundamentals

EURO: GROSS DOMESTIC PRODUCT 

The GDP of the Eurozone published by the Eurostat shows the cumulative value of total goods and services produced by countries within the EU. The GDP is regarded as a comprehensive test of economic activities and strength of the EU nations. Usually, a growing trend has a concrete effect on the EUR, while a declining trend is observed as bearish for the currency. For this week actual figure stood at 0.3% while the consensus was pegged at 0.2%, indicating a slightly bearish trend for the currency.

Unemployment Rate

The Unemployment Rate published by the Eurostat is the sum of unemployed workers divided by the total number of civilians in the labour force. The stat is a leading indicator in determining the health of the European Economy. A rising rate indicates a lack of expansion within the European lobar market resulting in a weakened European economy. A drop in the figure generally suggests a bullish trend for the EUR, while improvement is seen as negative for the currency. For this week, the actual and consensus figures read 7.8%, indicating a slightly positive sentiment for the Euro.

USD NEWS

ISM Manufacturing PMI 

The Institute for Supply Management (ISM) Manufacturing Index indicates the state of business in the US manufacturing sector. The ISM index is an important indicator of the United States’ prevailing economic condition. A value above 50 is considered positive, while a value that is less than 50 is seen as negative for the USD. The consensus figure for the week is 55.3 indicating a bullish sentiment for the currency.

Technical Analysis

EURUSD: Monthly Charts

EUR/USD Monthly chart - May 2 2019

In a previous post, we mentioned that the foreign exchange of the EUR/USD has been in a bearish (downward) trend since February 01 ’18, and a further increase in selling pressure on June 01 ’18.

As illustrated above, we observe buying pressure formation on December 03 ’18. The bulls were countered by opposing selling pressure on February 01 ’19, and the bullish pressure support level of 1.12695 finally gave way to bearish dominance on March 01 ’19.

At the opening of the month of May, the monthly chart view signals an increase in selling pressure.

EURUSD: Weekly Chart

EURUSD weekly chart - May 2 2019

A view from the weekly time frame reveals a huge presence of the bears as the bullish support of 1.13288 and 1.11838 couldn’t hold their grounds. However, whenever the bulls have their way, they often form sharp moves as we’ll reveal from the 4hour time frame.

EURUSD: 4HR Chart

EURUSD 4H chart - May 2 2019

The above 4hour chart clearly shows the weakness of the bulls as their support levels collapse to bearish pressure, offering great low risk shorting opportunities. 

Entering a short sell trade after the closing price on April 18 ’19 00:00, the price plummets by 1.25% with a risk of about 0.41%. 

As the bearish trend progressed, the pair offered extra opportunity to scale into existing downward trend following another failure of the bulls on April 23 ’19 04:00 for a 0.94% gain by the USD on major US binary options brokers.

Towards the end of the bearish trend, the bulls finally took control of the market forcing the price to pierce beyond the selling resistance on April 26 ’19 00:00.

EURUSD: H2 Chart

EUR/USD H2 chart - May 2 2019

Moving way down to the 2hour chart, more failure of bullish sentiment was revealed on April 22 ’19 18:00 reinforcing the selling pressure of the Euro. 

You may be wondering, at what point did the bulls take over the market? Well, on April 25 and 26, bearish accumulation resistance failed to bullish pressure, and later forced price out of a rising-triangle formation on April 29.

Conclusion

Before publishing this post, the pair EUR/USD witnessed a sudden rise in volatility across the time frames, leading to collapse of bullish accumulation resistance on the 1 and 2-hour charts.

We look forward to a continuation of the declining exchange rate, and opportunities ride the bearish trend south.

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