EURUSD Forecast
Contents
Introduction
The EURUSD has been in a downtrend since a collapse of significant support 1.2102 on 07 June ’21 as some binary brokers lean towards the Greenback in the short term, as the Federal Reserve meeting strengthens the dollar.
The outlook for the general policy for both fiscal and monetary is key for investors and institutions at the moment, as speculations continue on the recent news of the Delta variant virus.
EURO and US News
German Unemployment
This report shows the number of people who are unemployed during the previous month.
It is seen as a lagging indicator by traders, online brokers, and investors. However, they see the outcome as an important signal of the overall economic health because it has strong correlations with labor market conditions.
If the outcome is lower than expected, it is good for the currency, but a higher outcome than the forecast is not suitable for the currency. The forecasted outcome for unemployment is -20K, while the previous outcome was -15K.
A hint from a senior Federal Reserve official has informed the market participants that the US cannot afford a housing market boom and bust cycle which will make the financial market unstable.
This is the concern of the Central bank over the rise of the property prices. According to Eric Rosengren, the 2% inflation target is their goal so that they avoid the boom-and-bust cycle in real estate.
He noted that since the COVID-19 pandemic; the Federal Reserves has been buying over $40 billion in agency MBS per month alongside $80 billion in Treasury debt monthly as part of their asset purchase program since the pandemic. They intend to remove some of the sizeable monetary support for the economy.
ADP Non-Farm Employment Change
The data gives an early report about the employment growth in the economy ahead of the government -released data on employment. It comes out 2 days before the non-Farm payroll release.
ADP analysis is derived from over 24 million works across the country to get the growth estimations. The estimation is done considering the numbers of people employed in the previous month excluding the government and farming industry.
The previous month’s release was 978K while the forecast is 555K. An actual data higher than the forecast is good for the currency while a lower outcome is not suitable for the currency.
EURUSD Technical Analysis
Monthly Chart Objective: Down Trend Buildups
Monthly Resistance levels 1.25776, 1.22651.
Monthly Support levels 1.16900, 1.05999.
The EURUSD pair is building a bearish momentum on the monthly chart as we can see that the present candle is engulfing the previous month. If the bears can continue to push the price down, we may see the support level of 1.1600 give way to the bear’s pressure and the Bears will aim to reach the support level of 1.03522. The Bulls may try to hold the low of March 2021 (1.1700), if the support is strong, we can see the Price bounce back towards the resistance zones of 1.25555.
EURUSD: Weekly Chart Down Trend
Weekly Resistance levels 1.2340, 1.22615
Weekly Support levels 1.18423, 1.17088
The Resistance zones have been sold for weeks before the Bears were able to push back the Bullish rally that took the price up right from the COVID-19 pandemic.
Bearish momentum below the weekly support of 1.2 which will take the EURUSD pair down to the low of 1.1000.
The Support level (1.17088) is the psychological zone for both traders as they wait for the reaction of price around the zone for either a break out below or to bounce from the zone.
EURUSD Daily Chart Projections: Downtrend
Daily Resistance Levels 1.225576, 1.22651, 1.20048
Daily Support levels 1.18407
The EURUSD pair did enjoy the bullish rally that started from the support level of 1.17088 2020 March, reaching the high of March 2021 with about 4.76% before the pair changed direction from a bullish run to a bearish trend.
Again, the bearish trend is strong and there is a possibility that the price movement will break the support of 1.18423 to push down the price back to the low of 1.17088.
Conclusion and Weekly Price Objectives
As the week progresses, investors have shown concerns about the recent spike in the COVID-19 infections in Asia as Australia is being plunged into a lockdown after a cluster of cases involving the contagious Delta strain went viral. Malaysia is set to extend its lockdown and other regions as well.
Online brokers and investors are also following the U.S President Infrastructure deal through congress. The package can boost demand significantly by driving investment in the aspects of renewable energy in electronic vehicle (EV) infrastructure.
As the U.S news is released during the week, if the outcome favors the US dollar, we may see the EURUSD pair drop lower and lower.
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.
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