EURUSD Weekly Outlook & Technical – March 26 2019

EURUSD Outlook & Technical Analysis for US Binary Options

Introduction

Last week, some Central Banks across the globe began a slash in interest rate, following a slump in the price of major currencies on RaceOption platforms.

The European Central Bank ECB started a program to buy European bonds of about 750 Billion EUR, a value roughly 6% of the GDP in the Eurozone.

Also, the antivirus program against the corona virus funded with about 120 Billion EUR in addition to the other programs should bring the ECB asset to a total of 1.11 trillion EUR.

The Euro dominated the Great British Pound for six weeks in a row, with last week also closing bullish while in the overbought region.

Let’s turn to the charts and analyze some critical patterns and levels that could hint the EURUSD trend and mention some other fundamental events we consider worth mentioning for the week.

Fundamentals

German IFO Business Climate Index

The Index appraises the prevailing German business environment, measuring projections for the coming six months. 

The index takes into account, data polls of builders, manufacturers, retailers, and wholesalers, and is collected by the Institute for Economic Research (IFO).

A lower than expected text means a negative bearing for the currency, while a higher than expected reading means a bullish movement for the currency.

Traders can look forward to a positive trend for the Euro following the most recent data, which was released on March 19, 2020. The data reads thus; actual reading 87.7, previous reading 96.0, and the forecast reading 95.3.

U.S. New Home Sales

The New Home Sales index evaluates the yearly number of fresh single-family homes that were sold during the previous month.

A lower than expected text means a negative bearing for the currency, while a higher than expected reading means a bullish movement for the currency.

Traders can look forward to a negative trend for the U.S following the most recent data, which was released on February 26, 2020. The data reads thus; the actual reading is 764K, the previous reading 708K, and the forecast reading 710K.

EURUSD Technical Analysis

EUR vs. USD Long-term Objective: Bearish Continuation 

Monthly Chart

EURUSD Outlook -Monthly Chart- March 26 2020

Just when we thought the EURUSDs’ prolonged bearish trend was over, the 200-MA served as resistance as investors turn to the world reserve currency, the US dollar as a haven from the stock market crash.

The monthly chart overview shows a likely bearish engulfing pattern by the end of the month, and an entry of the oversold area.

We anticipate a possible regular bullish divergence of the stochastic oscillator as the pair approaches the 01 Dec ’16 1.03524 support.

Weekly Chart

EURUSD Outlook -weekly Chart - March 26 2020

A regular bearish divergence formation was established after the major currencies EUR and USD set up a higher trough on 09 March ’20 and found resistance below the 200 weekly Moving Average for a price slump of roughly -4.21% from the signal level.

An opposite regular bullish divergence is anticipated, as the pair sets lower low, compared to the oscillators’ higher low at press time. Although this is a likely scenario for a bullish recovery, a golden cross of the stochastic %K and %D would confirm the setup.

EURUSD Mid-Term Projections: Bearish Bottoming

Daily Chart

Positive fundamentals from the Eurozone have led to the accumulation of buy orders from the daily chart resulting in three consecutive bullish closing daily candlesticks.

A golden cross of the stochastic oscillator confirms an increase in demand for the EUR and a probable price reversal to the upside, as we enter into the rest of the week.

4HR Chart

Regular bearish divergence patterns on 08 March ’20 20:00 and 17 March ’20 00:00 were primary triggers that set the bearish tone from a 4hour time frame.

While entering and exiting the oversold area, the EURUSD started a close above bearish resistance levels (1.0710, 1.07804, and 1.07994) while we putt this post together.

Conclusion

The above technical analysis confirms our idea generation of Central Banks reducing interest rates, with the effect viewed as a regular bullish divergence Daily Time overview. 

 A regular bearish divergence of the USD Index also confirms a weakening of the USD following profit-taking from big traders and hedge funds, not forgetting the intervention from the Eurozone.

We expect a recovery of the EURUSD by the end of the week.

 

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