Written By : ForexAbode.com || Saturday, 27 December 2014 17:31 GMT

EUR/USD Weekly Outlook - December 28, 2014 to January 2, 2015

EUR/USD remained in sideways mode after touching the low of 1.2165 during the last week. The weekly closing was at 1.2181.

Fundamental Facts

Amidst the strong bearish sentiments for the euro, though on one hand the durable sales report from the U.S. showed a decline by -0.7% during November but the GDP data came bullish for the quarter 3. The GDP showed a growth of 5% against the 4.6% change in the quarter 2. Reuter/Michigan consumer sentiment index showed strengthening consumer sentiments in the U.S. as the data came up as 93.6 against the previous month's 88.8. Keeping in line with the consumer sentiments, the personal spending showed a positive change of 0.6%, up from the previous 0.2%. On the other hand the consumer confidence in Euro zone, remained weak at -10.9, though slightly better than the previous -11.5.

Technical Trends

As we had mentioned earlier, since EUR/USD had touched the high of 1.6038 during July 2008, the subsequent highs have been getting lower. This fact combined with the decisive break of 1.2500 psychological support suggests that we may look some deeper declines in the coming days. 1.2100 range may keep the currency pair is some sideways mode because of the approaching strong psychological support of 1.2000. Some upward consolidation can't also be ignored. However the sentiments and outlook remain strongly bearish and a retest of 1.2042 is expected sooner or later.

On the upside last to last Friday's 1.2302 should act as resistance. Last week's range movement had remained below that level. In case this support fails then some further consolidation will be expected. however, even in such case we would expect a very strong resistance near 1.2440. The price=action has been finding resistance near the lower edge of the daily Ichimoku cloud since mid-October. On weekly chart we can see that the Tenkan-line has been acting as resistance since end of June 2014. These both resistances fall in the range of 1.2410 to 1.2440. On daily chart, we can also witness that the 55-day EMA has been acting as a strong resistance. The current 55-day EMA is at 1.2415. Even if this resistance fails, we expect any upward gains to be limited to December 16th's 1.2569.

On the down side some support will be expected in the range of 1.2120 to 1.2140. A decisive break of this support range should take EUR/USD to retest 1.2042 first. This level will be crucial to for a longer-term prospects of the currency pair. Any breach of this support should extend the decline towards 1.1877 of June 2010 and possibly deeper.

Analyze Yourself - Various views of EUR/USD Price-Action

EURUSD daily chart with exponential moving averages - December 28, 2014

EUR/USD 4-hourly chart for short-term outlook

EUR/USD daily chart with Ichimoku cloud - December 28, 2014

EURUSD weekly price-action with Ichimoku cloud - December 28, 2014

EURUSD historical chart of over 10 years indicating bearish outlook.

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