EURUSD Weekly Outlook & Technical – January 24 2019

EURUSD Outlook & Technical Analysis for US Binary Options

Introduction

The EURUSD remains a favorite on major binary options broker platforms, where Race option traders take both long and short positions following its predictively low volatility and established resistance and support levels.

In this post, we’ll touch on some of these technical chart patterns and some key events driving the EURUSD exchange rates.

Fundamentals

Eurozone Interest Rate Decision

The Interest Rate of the Euro Zone is established by the Executive Board and the 16 governors of the euro area central banks as well as the 6 members of the ECB who vote on where to establish the rate.

A higher than expected data reading is positive for the EUR, whereas a lower than predicted text is negative for the currency.

A positive outlook can be expected for the EUR based on the most recent data, which shows that the actual reading, forecast, and previous readings as 0.00%.

U.S. Crude Oil Inventories

Crude Oil Inventories, which is regulated by the EIA, is a weekly appraisal of the variations in the barrel count of commercial crude oil owned by U.S. companies.

A decline in inventories is a negative sign for the USD, whereas an increase in stock is a positive sign for the currency.

A higher than expected data reading is positive for the USD, whereas a lower than predicted text is negative for the currency.

A bearish outlook can be expected for the USD based on the most recent data, which shows that the actual reading is -2.54M, the forecast is -0.474M, and the previous reading is 11.164M.

EUR vs. USD Long-term Objective: Impending Reversal

EURUSD Technical Analysis

Monthly Chart

EURUSD Outlook - Monthly Chart - January 25 2020

The EURO vs. USD, major currencies of the FX market, now comes out of an oversold state of the stochastic oscillator and simultaneously, signaling a hidden bullish divergence pattern.

The exit of oversold is a significant move for a bullish swing, considering that the pair had been in a seven-teen month’s bearish trend. A breakout of hidden bearish resistance is flagged on Dec 02 ’19. However, a collapse of the 1.09812 support of Nov ’19 would prove that the bears have not let go of market control.

Weekly Chart

EURUSD Outlook - Weekly Chart - January 25 2020

A view from the weekly time frame shows the EURUSD forming higher lows, after the pin-bar support (1.08792) on Sep 30 ’19.

The price close (1.10601) above key resistance on Dec 02 ’19 confirmed the first higher low for the price increase. 

Upon signaling a spinning top price pattern on Dec 30 ’19 (1.12393) and nevertheless trades below the MA-200.

EURUSD Medium-Term Projections: Bullish Correction Phase

Daily Chart

For a mid-term overview of the EURUSD performance, we take to the daily time frame, where the pair trades in an ascending channel with levels established by divergence patterns of the bearish and bullish variations.

The price breakdown also confirms the collapse of the head and shoulder neckline as the forex exchange slides into the oversold area. We should expect a further slowing of the Euro into the remaining days of the week.

4HR Chart

The EURUSD trades below the MA-200 from a 4hour chart perspective, and the regular bullish divergence pattern could not hold the further price decline.

Below is a daily chart of the EURGBP showing the dominance of the Great British pound, which consequently led to a decline in volatility on the EURUSD.

DAILY Chart

Chart patterns signaled on the EURGBP currency pair are significant for identifying major price moves of the EURUSD, mainly due to the Brexit event.

Whenever the EURGBP flags a divergence pattern like the one on Jan 16 ’20, it shows the further weakness of the Euro forex exchange rates across the FX market.

Conclusion

Considering the analysis above, the EURUSD shows good potentials of coming out of the prolonged bearish state and bringing more demand for the pair. However, the recent increase in demand for the GBP, as shown on the EURGBP chart above explains the slowing and low volatility of the EURUSD in a quest to attain new highs.

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