EURUSD Weekly Outlook – May 21, 2021

Last Updated on May 21, 2021

EURUSD Outlook – May 21 2021

Introduction

The world’s largest economy (The US), has not yet stabilized from the effect of the global pandemic that affected the world’s economy.

Most PocketOption investors, traders and forex brokers are concerned about the recent market volatility because of the stimulus intervention that is in abundance and has led to the rise of inflation in the U.S economy.

The recent events are expected to force the Federal Reserve to reduce its support through rate hike so that the largest economy in the world won’t be overheated.

EURO and US News

EUR Flash Services PMI

The Purchasing manager index in the services industry is being surveyed after a certain period in the month. Traders see it as a leading indicator of the economy in terms of its health and market conditions.

However, over 4900 purchasing managers were asked the respondent rates of the relative condition of businesses in the economy in terms of production, order, prices, supplier deliveries and inventories as well.

If the measurement in the level of diffusion index is above 50.0 it shows an expansion in the economy and is good for the currency while an outcome below 50.0 shows contraction in the economy affects the currency.

The Forecast is 52.5 while the Previous data was 50.5.

Ahead of Wednesday’s release of the minutes of the meetings by the Fed, investors, institutional traders, forex brokers will monitor it closely among others for any indications of where monetary policy is heading and what may happen to the U.S dollar in the year.

Philly Fed Manufacturing Index

The Index is a leading component of the health of an economy because business reacts to the outcome of the market conditions and the changes in market sentiments in the areas of spending, hiring and investing.

In the Philadelphia Federal Reserve district, they carried out a survey among manufactures of over 240 to rate the respective general conditions of businesses.

The report is released on the third Thursday of a new month and a result that is higher than the forecast is good for the U.S currency. The Forecast is 41.8 while the previous outcome was 50.2.

EURUSD Technical Analysis

Monthly Chart Overview: Bullish Swing in resistance Zone

EURUSD monthly chart - May 21 2021

Resistance Levels    1.25558, 1.21555

Support Levels     1.10390, 1.0359, 1.16000

The US dollar has been under pressure since the bulls could find support around the level of 1.16000 as of March 2021 by pushing back the price towards the resistance zones.

For the bullish swing to continue on the monthly chart we need to see the bullish run closing above the highest level of resistance which is the 1.25558 zone for it to be a continuation of an uptrend.

If the resistance zone is still a strong zone after some weeks against the bulls, we may see the bears push back from the level for a bearish swing back to the support zone of 1.16000 and 1.10390.

EURUSD: Weekly Chart Bullish

EURUSD weekly chart - May 21 2021

Weekly Resistance Level: 1.23495, 1.2150

Weekly Support Level: 1.16875, 1.07750, 1.08964 

The new week started with the European stocks trading off the previous record high of 0.5% it had on STOXX 600. This will attract the long position traders to leave their trades opened in anticipation of a close above the resistance levels of 1.2349 and 1.2150 during the trading week.

The weak U.S dollar reflected on the dollar index DXY with a fall of 0.4% to its lowest since February 25th 2021.

If the Euro bullish run should not close above the resistance zones, we shall see the Bears rejecting the bulls’ advancements around the zones for a bearish rally to the 1.08964 support levels.

Daily Chart Projections: Bullish

Daily Resistance Level: 1.22430, 1.2150

Daily Support Level: 1.17042, 1.19860, 1.20515

Recent cases of COVID-19 are being reported in some part of Asia which led the government to place a fresh anti-virus restriction within the county. However, this helped the US dollar to make some recovery of its losses against other pairs while it is still down against the Euro.

The bullish run is likely to continue as we expect the Bulls to test the high of the resistance for a breakout of the zone.

If the Bears can hold the resistance, we may see the zone rejecting the Bulls pressure for a down rally.

Bullish Scenario:

On the daily chart, we can have a possible bullish run for the week as the candles towards the resistance of 1.22430 have the momentum to close above the zone for an uptrend.

Bearish Scenario:

The Bears will have to wait for the bulls to run out of steam within the resistance zones on the weekly chart before we can get a bearish setting for the EURUSD pair to be a downtrend.

Conclusion and Weekly Price Objectives

The US dollar is weak for the trading week and the rating outlook by the Federal Reserve is another point forex brokers and investors would pay attention to as members of the committee will read out their reports.

However, some EURUSD investors are optimistic that the US interest rates would remain low so that it will them look past the recent rise in the COVID19 infections in Asia which will boost the exchange rate for them.

 

James S. Martin
Latest posts by James S. Martin (see all)

Leave a Reply

Top International Brokers *
Pocket Option

50% Bonus ( Bonus code: 50START)

RaceOption

Up to 200% Bonus + Giveaway Prizes

BinaryCent

Up to 100% Bonus + Giveaway Prizes

Finrally

Up to 100% Bonus

Automated Binary

This AutoTrading Robot is closed! Check our list of Auto Trading Robots .

en_USEnglish