Hey! This is Philip with our new weekly outlook of the Forex market.

 

 

 

Nothing has changed in the weekly EURUSD technical picture since last week. The 1.1350 resistance is strong and continues to hold. The bearish candle patterns remain in place and suggest some further downside price action is more likely. EURUSD is now rising at the start of the week, but it remains to be seen whether this attempt will also be rejected like the other ones in recent weeks.

One risk to the moderate bearish outlook is, of course, the possibility for a bullish breakout above 1.1350. Given the distinct resistance here, some may argue that a violent bullish breakout would be possible if the price would push above this area. However, we must also remember that the 1.15 and the 1.17 areas are solid resistances, mainly due to the multi-year resistance trendline that currently stands there. So, moving higher is unlikely to be an undertaking task for the pair.

To the downside, 1.10 remains the main support. If the price pushes below the 1.12 lows, then it will become increasingly likely that 1.10 will be reached.

 

 

New coronavirus infections in the United States continued to rise and reached new records last week. However, the markets didn't react by selling stocks and flocking to safety assets as investors see the declining trend in COVID-19 deaths as an encouraging sign. If this downtrend in fatalities continues, it will vindicate investors' optimistic views on stocks and the economy. In the meantime, experts are working on a vaccine and the hopes that one will be available by the end of the year or early next year are boosting optimism further.

All this means that the following few weeks will be crucial in determining the outlook for the pandemic. If death cases don't spike higher in tandem with new infections, it will be a massively positive development for markets and the economy as it will show that we are starting to win the fight with this virus. On the other hand, if death cases re-establish the correlation with new infections and start to rise, then we may be looking at another wave of ugly risk-off selling in markets.

Last week, the US recorded another solid jobs report with Non-Farm payrolls rising by 4.8 million, and the unemployment rate falling to 11.1%. However, as we suggested in the previous weekly analysis piece, there was little impact on markets from economic data. This week, the calendar is even quieter, and the economic data that is due will likely be even less impactful. Thus, the broad ranges across USD and other Fx pairs are likely to stay intact, at least for the following several trading days.

 

No market-moving events are scheduled on the EUR calendar either. After staging the optimistic rally in May, the single currency was also contained in the past few weeks. And, that trend is likely to remain in place over the near-term. While sideways ranges is the name of the game, we shouldn't underestimate the potential for unforeseeable developments as a possible source of volatility and trading opportunities in this uncertain COVID-19 market environment.

The approval of the recovery fund remains the main focus for EUR traders. While attempts to summon all 27 EU members to agree on the terms failed so far, investors are hoping that that will happen in two weeks when the EU Council meets again. Until then, watch out for any comments from EU officials and the newsflow about how progress is going.

 

 

If you have any questions or feedback, don't hesitate to reply to this email.

 

Best Regards,
Philip
Senior Forex Manager
FX Trading Revolution
w: www.fxtradingrevolution.com 

e: philip@fxtradingrevolution.com