EURUSD Weekly Outlook & Technical – February 9 2019

EURUSD Outlook & Technical Analysis for US Binary Options

Introduction

Last week, the EURUSD closed bullish on Race Option broker, showing temporary strength for the Euro. However, the prolonged BREXIT talks returned the edge to the Greenback, forcing the exchange rate to plummet in favor of the USD.

Read on, as we uncover the critical technical patterns alongside fundamental indicators driving the exchange rate of the EUR vs. USD.

Fundamentals

Germany Manufacturing Purchasing Managers Index (PMI)

The German PMI evaluates the activity level of purchasing managers in the manufacturing industry.

When data reading is above 50, it indicates an expansion in the sector, while a reading below 50 intimates a contraction in the sector.

From the most recent data released on February 3, a bearish outlook can be supposed for the EUR. The data shows that the actual reading is 45.3, the previous reading 43.7, and the forecast figure is 45.2.

U.S. ADP Nonfarm Employment Change

The ADP National Employment Report evaluates the shift in non-farm, private employment every month. The indicator is based on the payroll stats of about 400,000 business customers in the United States.

Any data reading that is lower than expected is rated bearish for the currency while a higher than expected reading is considered as positive.

From the most recent data released on February 5, a bearish outlook can be supposed for the USD. The data shows that the actual reading is 291K, the previous reading 199k, and the forecast figure is 156K.

EURUSD Technical Analysis

Monthly Chart

EURUSD Analysis - Monthly - Feb 9 2020

Above is a monthly chart illustration of the EURUSD with a hidden bearish divergence setup that’s yet to be affirmed by a dead-cross of the stoch-indicator.

The recent dominance of the GBP from the monthly time frame of the EURGBP further explains the bearish outlook of the EURUSD going forward.

A bearish close of the %K and %D of the stochastic indicator should reinforce an extended downward decline of the EURUSD forex exchange rate.

Weekly Chart

EURUSD Analysis - Weekly - Feb 9 2020

Similar to the month chart overview, the weekly chart perspective confirms a hidden bearish divergence in combination with a hidden price action resistance on 13 Jan ’20 and divergence resistance on 30 Dec ’19 (1.12393).

From the current price level at press time, the 27 Jan ’20 support does not look like it is going to stand the test of time, considering the increase in demand for the USD and general weakness of the EUR.

EURUSD Mid-Term Projections: Bearish

Daily Chart

The daily time frame also has its fair share of bearish divergence patterns, specifically on 31 Dec ’19 and 04 Feb ’20 at publication time.

A price breakdown of the 1.09924 support (29 Jan ‘20) is signal to scale into our short sell position as the pair sales into the oversold area.

4HR Chart

From a 4hour overview, the EUR vs. USD close below the 16 Jan ’20 22:00 support (1.11340), sinking further below the MA-200 for about (-1.21%) before signaling a counter regular bullish divergence on 29 Jan ’20 10:00.

Upon entering the MA-200 resistance zone, the EURUSD exchange rate resumed the bearish price descent, fortified by a collapse of the 1.10802 support and an exit of the overbought area.

Conclusion

In this week’s analysis of the major currencies (EUR and USD), we conclude that we are entering another round of price decline into the first half of Q2 ‘20, showing a stronger Greenback.

The analysis reinforces a continuation of the bearish right shoulder from the head and shoulder chart formation.

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