EURUSD – Weekly Outlook for 15th April 2022
EURUSD Forecast for Forex
This week’s trading activity started with a gap in the financial market as the economic and political uncertainties are on the rise and investors’ and Indian forex brokers’ sentiment is not certain.
The decision of the Federal Reserve on the sharp interest-rate hikes and balance sheet reduction is aimed at combating the price pressures. However, the French elections are another tweezer for the Euro zones as Macron takes the first lead in the early round of the election.
EUROPE: GERMAN ZEW Economic Sentiment
German institutions and analysts surveyed above 300 German Institutional Investors and analysts who are highly informed regarding the general condition of operating businesses based on the nature of their jobs, new orders, price, employment, prices, and inventories among other factors during the survey.
They are to rate and project Germany’s economic outlook in the next six months. A figure that is above 0 shows optimism while a figure below zero shows pessimism in the system.
The forecast is -48.4 and the previous data was -39.3.
US (CPI) CONSUMER PRICE INDEX m/m.
The CPI is a key factor for the overall indicator of inflation. The valuation of currency has its importance attached to inflation because the Central bank tries to control inflation by increasing the interest rate as a containment mandate.
The CPI measures the change in prices of goods and the prices of services that the consumers have purchased within a certain period. The data is released 16 days after the month ends after the average samples of price on goods and services are compared to the previous sampling.
The previous data was 0.8% while the Forecast is 1.2%.
EURUSD Technical Analysis
EUR vs. USD Monthly Chart Overview: Bearish Swing in Support Zone
Monthly Resistances: 1.12000, 1.14948.
Monthly Supports 1.07250, 1.06359.
The EURUSD pair has seen a about 2% drop in price from the opening position of the month as the direction favors the short position traders. The pair seems to be testing the previous support levels. Can the selling pressure break the support zone for a breakout below or we are going to see a bounce from the zone if the long position traders can overturn the price in their favor.
The Euro is faced with uncertainty as to the traders and forex brokers waiting for the outcome of the ECB meeting report and the US inflation test that will happen during the trading week. A breakout below the one of 1. O6359 will expose the pair to another bearish run.
Weekly Chart Bearish
Weekly Resistance Level: 1.15000, 1.13000, 1.12000
Weekly Support Level: 0.08750, 1.08000.
Looking at the weekly chart, you can see that the 28 March weekly candle could not sustain its position as when the negotiations between Ukraine and Russian representatives began. The bullish run was short-lived as it failed to breakout above the resistance zone of 1.12000 which turned in favor of the forex brokers who had short positions and were able to close the 04 April weekly candle on a bearish note.
The bearish momentum is pushing the price of EURUSD to the 07 March 2022 support zone, a close lower than the zone will likely take the price lower and lower.
EURUSD Daily Chart Projections: Bullish
Daily Resistance Level: 1.12000, 1.15000
Daily Support Level: 1.08740, 1.08100.
The currency market has seen the EURUSD pair struggle as domestic factors from the fundamentals show that the Euro’s reliance on Russian gas and loose monetary policy during the pandemic led to a global hiking cycle.
The Bears broke out of the flag for the bearish trend to continue. The price is testing the support level of 1.08100 and 1.08740, as the market waits for the inflation test from the US fundamentals and the ECB decision from their meetings. If the US dollar gets stronger and the test favors the currency, we may see the breakout below the market structure. Likewise, if the ECB meeting is hawkish toward the Euro, the weak currency will show more level of strength.
The Bullish scenario has a low probability because the bearish run has a stronger momentum as the Bulls failed to close above the 1.12000 for the trend to favor the bulls.
The bear market still favors the Bears as they have pushed the price down from the 1.12000 zones. The price is around the 1.08700 zone, the bearish scenario will continue if the fundamentals favor the US dollar and a breakout below happens below the 1.08000 level.
Conclusion and Weekly Price Objectives
News from the Feds chair Jerome Powell and other committee members is the aspect of selling mortgage-back securities as a plan to tighten the monetary policy which will be the first of its kind.
Forex brokers, institutions, and retail traders who are holding their short position on the EURUSD pair will be expecting the low of 1.08000 to break during the new trading week.