EURUSD Forecast
Contents
Introduction
The US central bank’s decision to shift its monetary policy ended at the end of 2021.
Online brokers are yet to see the impact in the market because the pair is still in consolidation.
However, as the trading activities resume in the new year, online brokers should note the different monetary policy waters ahead in the new year because some major central banks like the Bank of Japan, European Central Bank are still on the dove note.
EURO and US News
European: French Final Manufacturing PMI
A survey was carried out among 400 purchasing managers who rated the levels of business conditions, in terms of production, new prices, inventories, employment among other factors. An outcome that is above 50.0 is an expansion in the industry while a lower figure is a sign of contraction.
The outcome from the surveyed purchasing managers in the manufacturing industry will determine the level of diffusion and it is a relevant insight into the health of the economy that is why online brokers, and investors are interested in the outcome.
The forecast is 54.9 while the previous was 54.9.
US NON-FARM EMPLOYMENT CHANGE
This is also called NFP among other traders and online brokers. The data has a high impact on the forex market because of the combination of important factors relating to the health of the economy. Job creation is an overall factor in economic activity and it is a leading indicator of consumer spending.
The report excludes the farming industry and compares the change in the number of employed persons during the previous month. if the number of employed persons is greater than the forecast it is good for the US dollar but a lower outcome is not suitable for the currency.
The previous data was 210K while the forecast is 426K
EURUSD Technical Analysis
Monthly Chart Objective: Down Trend
Monthly Resistance levels 1.22664, 1.16164, 1.19090
Monthly Support levels 1.15245, 1.17041.
The EURUSD pair has been dropping off since the candlestick of 01 July 2021 closed in indecision after the bearish engulfing candle favored the US dollar in the forex market. The US dollar has gained about 5.6% from the July candle of 2021 against the Euro.
The lowest point on the November 2021 candle is the recent support level and a close below the zone will take the price of the EURUSD pair lower, However, if the support level can hold in months to come, the Bulls may push the price up towards the resistance levels of 1.16164.
Weekly Chart Down Trend
Weekly Resistance levels 1.16869, 1.15132
Weekly Support levels 1.11763
The weekly chart shows that the EURUSD pair had low volatility as of November before the 2021 year closed. Looking at the forex market, the downtrend dominated the chart from the 6th September 2021 week. The Bears were able to break out below the support zone of 1.16869 and 1.15132 to continue the downtrend.
If the next bearish swing can close below the support of 1.11763, we shall see the trend continues to go down.
If the consolidation zone should hold and the Bulls can sustain the pressure the price will rise in favor of the Bulls if confirmed reversal candles can be seen.
Daily Chart Projections: Downtrend
Daily Resistance Levels 1.13926.
Daily Support levels 1.11763.
The Forex market continues to range as investors, online brokers wait for the outcome of the first Non-farm payrolls which are coming up this week Friday, and also with the FOMC minutes set to be released.
The EURUSD pair has been in a rage for over a month since the last FOMC meeting, if the outcome of the meeting sets a positive tone for the US dollar and the Non-farm outcomes favor the currency, we may see the bearish trend continues.
Conclusion and Weekly Price Objectives
The Forex market has been quiet since the last meeting of the Federal Reserve and the Thanksgiving holiday. The first meeting of FOMC can hint at the new direction of the EURUSD pair when the minute is released.
The Non-farm payroll will also be another factor that may cause the market to experience volatility when the outcome is released.
However, it is good for the online brokers to stay out of a ranging forex market without a clear direction because of the uncertainty, and when the direction is cleared a trade can be placed.
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.
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