EUR/USD Outlook & Technical Analysis
- 1 EUR/USD Outlook & Technical Analysis
- 1.1 Introduction
- 1.2 Euro Zone Fundamentals
- 1.3 U.S. Fundamentals
- 1.4 EUR/USD: Technical Analysis
- 1.5 Conclusion and Weekly Price Objectives
Some countries are faced with the second hit of the coronavirus pandemic, which can affect the recovery time for the nation’s economy. The policymakers of the major economy of various countries will hold their policy meetings to adapt easing measures for a stable economy aggressively.
The EURUSD makes another correction in preparation to find a mid-term bottom as seen on BinaryCent broker platform after breaking out of the weekly Chuvashov’s fork formation.
Euro Zone Fundamentals
ECB Monetary Policy.
The monetary policies are geared towards finding the best response to handle the uncertainty of the Covid-19 and its effects on the eurozone. The ECB proposes to spend over a trillion euros on purchases of assets and reduce the interest rate.
Trading brokers are interested in the meeting’s outcome. If the outcome is more hawkish, it is good for the currency. Read on for more insights into recent macroeconomic and technical chart setups.
Flash Manufacturing PMI
This leading indicator shows how healthy the economy is and how businesses within the country respond to the changes in the market conditions.
The previous data was 36.14%, while the forecast is 37.5%. If the Actual data release is greater than the forecasted data, it is good for the currency.
EUR vs. USD Long-term Objective: Bearish
EUR/USD: Technical Analysis
Monthly Resistance Levels: 1.25558, 1.152557
Monthly Support Levels: 1.02992, 1.09058, 1.15257, 1.21545
The EUR/USD has been on a bearish trend for years. The most recent spike to the upside was met with strong resistance at the 1.15257. This resulted in doubling bearish accumulation on 02 March 2020, pushing the price down.
The support level of 1.02992 is exposed already because of the bearish trend. Trading brokers are interested in this zone because it is a psychological zone; they want to see how the price will react there because it will attract other players.
A bullish trend could be imminent if we get a bullish regular divergence from the stochastic once price enters that zone.
Weekly Resistance Levels:
Weekly Support Levels:
For the past weeks, the price of EURUSD has been on a downtrend right from the bearish divergence Resistance on the 09 March 2020. Price keeps making a higher low at every push of the price.
If the bulls cannot push back price above the present resistance zone of 27 April 2020, it will expose the support level of 23 March 2020 1.06359.
EURUSD Mid-Term Projections: Bearish Bottoming
Daily Resistance Levels: 1.14950, 1.13359, 1.11476, 1.10100
Daily Support Levels: 1.08356, 1.07683, 1.07683, 1.06359
The daily chart shows a bearish bottoming of EURUSD. The support zone of 1.0 and 1.10 has been holding for some days, while the price keeps making low highs.
From the above chart, we can see a descending triangle. Price could either break that support or shoot to the upside breaking through the resistance level.
H4 Resistance Levels:
H4 Support Levels:
The regular bullish divergence of 07, May 2020, took the price up from the support level of 1.07665. Another regular bearish divergence terminated the bulls rally on 12 May 2020 at 1.08854, pushing the EURUSD down.
The regular bullish divergence of 07, May 2020, took the price up from the support level of 1.07665. Another regular bearish divergence terminated the bulls rally on 12 May 2020 at 1.08854, pushing the EUR/USD down.
The bears have been dominating the trend for the market. In this pandemic, the economy of the major currencies has been wiggling (EURUSD), and if the resistance level of 1.08854 should hold, we may see a price surge downwards below the support level of 1.07665.
Conclusion and Weekly Price Objectives
Since countries have begun to ease the lockdown gradually, they may see some significant progress among the various economies of the majors.
The week is closing on a Doji indicating indecision in the market. It is safe for Traders and investors to ascertain the next direction for a better decision.