Last Updated on November 25, 2021
The US binary brokers are seeing a slow start in the market as the trading week resumes. The pair has seen two weeks drop as traders are cautious about the possible lockdown restrictions that could take place in Europe as the risk of COVID-19 may be on the rise again.
Also, the Federal Reserve taper program is another area of interest for forex brokers as the end of the plan may lead to an increase of interest rates by the FOMC.
Main Keywords: “forex broker ” ( In Article Introduction)
Other keywords: “US Dollar ” and “EURUSD” (In Article Body)
EUROPE MANUFACTURING PMI
Reports show that some nations are entering into their fourth COVID-19 restrictions because of the recent increase in the number of infected persons. A country like Austria in Western Euro is restricting movement and public activities are closing down, while Germany is warning its citizens that it may also introduce another lockdown.
The Flash Manufacturing PMI is a survey carried out among purchasing Managers who are asked to rate the general condition of operating businesses, employment, prices, new orders, and inventories among other factors during the survey. Their outcome is a leading indicator for the economic activities and businesses react to such outcomes.
Any figure that is above 50.0 shows that the industry is expanding while a lower figure shows that there is a contraction in the system.
However, if the outcome of the data is higher than the forecast it is good for the Euro but if the actual is lower than expected it is good for the US dollar. The forecast is 56.6 while the previous is 57.8.
US Unemployment Claims
Reports from the department of labor show records of individuals who are officially filing for an unemployment insurance policy for the first time in a new week. The number of unemployed persons does affect the economic activities of the country because consumers spending is related to the labor market. For those who stir the country’s monetary policy, unemployment is a serious factor.
The previous outcome on unemployment claims was 268K while the forecast is 259K. A lower outcome is good for the US dollar while a greater outcome is not suitable for the currency.
EURUSD Technical Analysis
EUR vs. USD Monthly Chart Overview: Bullish Swing in resistance Zone
Monthly Resistances: 1.22509, 1.19304, 1.17186
Monthly Supports: 1.09458, 1.17186, 1.11828
The EURUSD pair has dropped about 8.23% from June till the low of November 2021. The US dollar was able to recover some loss against the Euro having survived the pandemic that weakened the currency.
The bearish trend has been dominating the weekly time frame which has seen the price close below the psychological zone of 1.17186. More sellers were able to push the price lower and lower. The 1.11828 level is the next zone the price may want to take out or it gets rejected.
If the price should push lower than the 1.11828 levels, the Buyers will be waiting around the next low of 1.09458 for a push higher. Right now, there are few buyers in the market on the monthly time frame.
Weekly Chart Bearish
Weekly Resistance Level: 1.22509, 1.16553, 1.19148
Weekly Support Level: 1.15112, 1.16785, 1.14000
The weekly timeframe of the EURUSD pair shows that there’s a strong presence of sellers in the market as the market participant saw 2 strong bearish candles close in two weeks. News about another lockdown in some parts of Europe is another fear factor for investors and Forex brokers.
A breakout below of the consolidation (1.15112) indicated that the US dollar is gaining momentum and the Euro currency is weak. The price EURUSD still has some distance to the next zone of support before a visible rejection of price can be seen.
Daily Chart Projections: Bullish
Daily Resistance Level: 1.16870, 1.19150
Daily Support Level: 1.12510, 1.15217,
From the chart, we can see that the EURUSD pair was consolidating for about three to four trading weeks before the price broke out of the range with a bearish engulfing candlestick.
The trading week is still unsettled with the sudden news about Austria’s fourth lockdown is coming as a sock because of the rise in COVID-19 cases rises. However, this news was met by some protesters while some fear that the spread is a result of non-vaccinated persons.
The lockdown will affect businesses, some services and it will negatively affect the growth of the economy. From the records, about 65% of the population are fully vaccinated and they have the lowest rate of infection in Western Europe.
A weak bullish scenario is expected on the daily chart as Forex brokers are observing the effects of the lockdown and how it will influence the currency market. If the price can establish support, we may see a bounce around the zone.
Short position traders are dominating the market, a close below the low of 1.15217 will give the US dollar strength against the Euro and the bearish trend will continue until we see a reversal of the trend.
Conclusion and Weekly Price Objectives
The US dollar is stronger as the currency pair is on a downtrend. Many Forex brokers and other institutional traders are paying attention to the FOMC as they plan to unveil their plans regarding the Federal Reserve taper program.
EURUSD is still bearish as we await the reactions of the participants in the coming days after they have factored the effects of events to the financial market.