Written By : ForexAbode.com || Sunday, 04 January 2015 03:40 GMT

EUR/USD Weekly Outlook - January 5, 2015 to January 9, 2015

EUR/USD  broke below July 2012's strong support of 1.2042 to go as low as 1.2001 before closing bearishly at 1.2002.

Fundamental Facts for EUR/USD

There have been few economic releases during the last week due to the holiday seasons. 

The consumer confidence in the U.S. further improved from 91.00 to 92.6 and the pending home sales which grew to 4.1% from previous month's 2.1%. However the month over month construction spending witnessed a decline from 1.2% to -0.3% during the same month. The initial jobless claims from U.S. came out weak with 298K against the previous 281K. Markit manufacturing PMI from the U.S., for December, also came out weaker at 53.9 as compared to previous month's 54.8. ISM manufacturing PMI also witnessed a decline from 58.7 to 55.5 in December.

The main market moving data from the Europe were the Markit manufacturing PMI from the euro zone and Germany. Both of these witnessed a slightly improved results during December. The euro zone's manufacturing PMI improved from the previous month's50.1 to 50.6 and that of Germany's came out as 51.2 against November's 49.5.

EUR/USD Technical Trends

As we have been mentioning during the previous updates, 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 had suggested that the pervious corrections may already be over and a mid-term high might be in place at 1.3993 of May 2014. This outlook also gets a confirmation with EUR/USD breaking below 28 month's low. The break below 1.2042 of July 2012 was a major bearish move, however it was expected as we had mentioned during the previous outlook update.

The price touching 1.2001 before closing for the week just 1 pip above that indicates that the psychological support of 1.2000 is not proving to be significant. However, this support may bring some sideways moves but considering the past two and a half week's trend of resistance near the 5-day EMA, we expect the resistance to hold in the range of 1.2069 to 1.2110. 

With the above mentioned resistance in place, we expect a break below 1.2000 sooner or later. With such a break the next target would be 1.1877 of June 2010 and possibly deeper.

 On the upside any break above 1.2069 will be the first sign of some extended correction but a better indication will come only with a decisive break above 1.2110. Even in such case we will expect the recovery to be limited to 1.2221 of December 29, 2014.

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

EUR/USD 4-hourly chart - January 4, 2015

EURUSD daily chart with exponential moving averages - January 4, 2015

EUR/USD daily chart with Ichimoku cloud - January 4, 2015

EURUSD weekly price-action with Ichimoku cloud - January 4, 2015

EUR/USD with daily MACD

EUR/USD with weekly MACD

EURUSD historical chart of over 10 years indicating bearish outlook - January 4, 2015.

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