EURUSD Forecast
Contents
Introduction
Top Online Brokers reacted to the recent announcement of the Omicron virus which distorted the financial market and the stocks. However, the market is recovering from the effect of such news and we can see some levels of stability.
EURO and US News
According to Pfizer and BioNTech reports on omicron variant, they state that 3 doses on the vaccines will neutralize variants from the SPFE-UK. A plan B has been put in place as restrictions may be introduced if there are about 80% chances of UK residents getting infected with the omicron variant.
Investors are also cautious of the recent development since the UK plans to introduce another lockdown or other COVID-19 measure while the ECB will likely review its policy because research shows that immunizations provide a little or partial barrier against the new omicron variants.
German ZEW Economic Sentiment
The level of diffusion index was carried out among 300 German institutional investors and the outcome of their respondents is projected into the next 6 months of the German economy. Investors pay attention to their sentiment because any change is an early sign for the future economy. The forecast is 25.3 while the previous data was 31.7
US CPI m/m
The consumer price index measures the goods and services a consumer purchases and the changes that occurred during certain periods. The consumer price accounts for the overall inflation because the rise in prices will force the central bank to raise the interest rates to control inflation.
An output higher than the forecast is good for the currency but a lower result will not be suitable for the currency. The previous data on 0.9% while the forecast is 0.7%
EURUSD Technical Analysis
EURUSD: Monthly Chart Objective: Down Trend Buildups
Monthly Resistance levels 1.16283, 1.18884
Monthly Support levels 1.09952.
The EURUSD pair on the monthly time frame has favored the short position traders and they are eyeing the support level of 1.09952 before the price will find its rest on the time frame. The Euros have been weak for some months which has to strengthen the dollar.
The Forex market was calm after the cases of the omicron variant is mild and the market is recovering from the selloff.
Weekly Chart Down Trend
Weekly Resistance levels 1.16842, 1.18992, 1.17088, 1.13840
Weekly Support levels 1.12137
The forex market is still bearish as online brokers who are holding on to their short position will observe the current situation of price as the price has slowed down around the 1.12137 zones. If the price can close lower than the zone, we shall see the bearish trend continues. For the past two weeks, the EURUSD price has slowed down, if the price can close above 1.13840 zones, we shall see the trend reverse.
Daily Chart Projections: Downtrend
Daily Resistance Levels 1.13831, 1.16107.
Daily Support levels 1.18480, 1.12281
The online brokers may get a reverser on the daily time frame if the price of the pair can breakout above the resistance level of 1.13831. Should the price close above, we shall see the price go higher towards the 1.16107 levels if the bullish momentum is strong. The Bullish engulfing candlestick which created the first surge is an indication that the Bulls want to reverse the trend.
However, if the Bull’s momentum should fade out the Bears may continue their bearish run with a close below the support level of 1.12281.
Conclusion and Weekly Price Objectives
The US Federal Reserve hints that the Omicron strain is not out of control because of the low impact it has. The European Union has set a benchmark for its carbon price to hit 100 euros towards the end of the year. The European Union Emissions Trade System (ETS) has drawn the attention of some manufacturers, online brokers, power-producing companies, and airlines. They are to pay attention to attention to the tonne of carbon dioxide they emit.
The objective of the EU is to cut down the net greenhouse gas emissions by 54% starting from 1990 to 2030. Looking at further analysis the 100 euros per tonne is achievable because of the bullish factors supporting the goal. The prices of gas are on the rise which opened up a profitable opportunity for the coal power plants, which is profitable than gas.
Several reasons are contributing to the rise in gas prices because of the cold weather forecast and major maintenance in the gas industry. Also, the rising tension at the Ukrainian border between the West and Russia is another factor.
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.
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