EURUSD Weekly Outlook & Technical – July 17 2020

EURUSD Outlook & Technical Analysis for forex

Introduction

The USA is among the countries with high COVID-19 pandemic rates during the second wave in recent times, and the impact is visible across major US binary options brokers platforms as currencies like the Euro and GBP show strength against the Greenback.

However, the rush of the COVID-19 vaccines is on as the majors struggle to handle the health hazards. The uncertainties in the market would slow down the current rebound in global economies.

Euro Zone Fundamentals

The ECB Monetary Policy Statement:

European Central Bank press release on the monetary policy changes will be a driver for investors and other institutional players. It will inform them about the interest rates, commentary on economic conditions for decision making in the future.

However, if the press release is more hawkish than expected, it is good for the currency, but it is not good for the currencies if it is dovish.

U.S. Fundamentals

The USA Core Retail Sales m/m:

The number of affected persons with COVID-19 cases is on the increase in some US states, some states like Florida and Miami. 

The outcome of these cases will inevitably affect the businesses within these states and the retail sales output in the nearest future.

The Core Retail Sales reports in the United States of America measures how the total value of sales at the retail levels changes. 

From the extracted data, it excludes automobiles from its release.

The previous data release on core retail sales was 12.4%, while the forecast is 5.0%. If the Actual data released is greater than the forecasted, it is good for the US dollar, but if it is lower than forecast, it isn’t good for the currencies.

EUR vs. USD Long-term Objective: Bearish Correcting 

EURUSD: Technical Analysis

Monthly Chart

EURUSD analysis - Monthly Chart - July 17 2020

Monthly Resistance Levels: 1.25558, 1.21545, 1.18523, 1.15698, 1.14950, 1.14225

Monthly Support Levels: 1.10292, 1.08288, 1.06359, 1.03402

For three months in a row, we can see that the major currencies (like Euro) are gaining strength against the dollar. The price is approaching a resistance zone of 1.14950 that had a previous rejection of the Euro to the upside.

In the coming months, we may see another rejection of price, or we may get a breakout above the resistance zone of 1.15698.

Weekly Chart

EURUSD analysis - Weekly Chart - July 17 2020

Resistance: 1.14222, 1.14963

Support: 1.06361, 1.07666, 1.08965, 1.08968, 1.09812, 1.10322, 1.11726, 1.12430.

The EURUSD rejected the price on 8 June 2020 after the ‘initial bullish surge at the 1.14222 zones. As price is approaching the zone again, we may see another rejection, which may signify a double top, a reversal pattern for a downward movement.

The Euro made a significant gain against the US dollar for weeks after the major currency pair found to support that rallied the price up from the 1.07197 and 1.07666 support zone. 

From the bulls run, could it be that the trend rested? As the new week unfolds, can we see a continuation of the bullish trend if the price movement can successfully close above the resistance levels of 1.14222 and 1.14963 in the coming weeks.

EURUSD Mid-Term Projections: Bullish Correcting

Daily Chart

EURUSD analysis - Daily Chart - July 17 2020

Daily Resistance Lev

els: 1.13406, 1.14226, 1.14971

Daily Support Levels: 1.06377, 1.07271, 1.07684, 1.08707, 1.09911

The Golden cross of 50 and 200 Moving averages signifies a continuation of the trend. If the golden cross’s effect is to have its course, then the EURUSD must overcome its huddles, i.e., a close above the resistance zones of 9 March, 10 June, and 12 June 2020 1.14971, 1.14226, 1.13406.

However, from the daily time frame, we can see that the lows are getting higher while we have an equal level of resistance at 1.13406, giving an ascending triangle. If the bull’s pressure is sustained, we may see a break out to the upside exposing the 1.14226 level. Keeping this in mind also, if it fails, we will get another rejection of price pushing it back to the 1.11681 support level.

H4 Chart

H4 Resistance Levels: 1.13205, 1.14225

H4 Support Levels: 1.12779, 1.12610, 1.11660, 1.1190 

The resistance zone of 1.13205 and 1.14225 has been a strong zone for the bulls to break through after several tests. The zones have been unbreakable since 10 June 2020.

The regular bullish Divergence of 21 June took the EURUSD up after the retest of the 1.11660 and 1.11900 support zones; the bulls have been pushing the price up because we can see that the lows are getting higher and the highs are getting higher. 

Bullish Scenario:

The bullish build up on the daily time frame is the determinant factor for a bullish trend in the coming days as we await a break above the resistance level. 

The Major is in a range on the H4 time frame, and if it early uptrend gets stronger, it will break out from the range to the upside in the nearest future.

Bearish Scenario:

The resistance level of 1.13205 and 1.14225 has been a dependable zone for the bears, always pushing back the bullish surge. However, the zone is under another retest from the bulls. If the bears are stronger, they can repel the bulls’ advancement and takedown price to 1.11660.

Conclusion and Weekly Price Objectives

The USA continues to have high records of coronavirus cases across the country as some numbers of states are thinking about lockdowns to curb the spread of the virus. 

The effects of the virus may force other sectors to close down after the reopening of businesses. In the US, some hospitals are already overwhelmed with new patient cases, and no room for admission as new daily records are still-escalating.

 When you connect the lows on the H4 timeframe, we can see that the pattern is an ascending triangle, and we expect the Bulls pressure to close above the resistance zone of 1.3205 to rally the price up to 1.14225 if the bulls can succeed at that. However, if they fail to take the price up, we may see the bears push back the price to the low of 1.12779 or 1.11900.

 

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