EURUSD Weekly Outlook: More Volatility Likely, But Can The Pair Finally Break Out?

FX Traders’ weekly EURUSD fundamental & technical picture, this week’s market drivers that could change it- the bullish, the bearish and likely EURUSD direction.

The following is a partial summary of the conclusions from the fxempire.com  fxempire.com ’ meeting in which we cover outlooks for the major pairs for the coming week and beyond.

Summary

1. Technical Outlook: Near term indecisive, longer term clash of momentum and resistance
2. Fundamental Outlook: Neutral Near Term, Bearish Longer Term & What’s Driving The Continued Trading Range
3. Conclusions: Likely trading range, drivers, & catalysts needed for breakout as conflicting trends converge.

TECHNICAL OUTLOOK

First we look at overall risk appetite as portrayed by our sample of global indexes, because the EURUSD has been tracking these fairly well recently.

Overall Risk Appetite Per Weekly Charts Of Leading Global Stock Indexes

Overall risk appetite per sample of weekly charts for leading global stock indexes shows virtually no change from the prior week.

EURUSD Weekly Outlook: More Volatility Likely, But Can The Pair Finally Break Out?

Weekly Charts Of Large Cap Global Indexes With 10 Week/200 Day EMA [DATES] In Red: LEFT COLUMN TOP TO BOTTOM: S&P 500, DJ 30, FTSE 100, MIDDLE: CAC 40, DJ EUR 50, DAX 30, RIGHT: HANG SENG, MSCI TAIWAN, NIKKEI 225

Key For S&P 500, DJ EUR 50, Nikkei 225 Weekly Chart: 10 Week EMA Dark Blue, 20 WEEK EMA Yellow, 50 WEEK EMA Red, 100 WEEK EMA Light Blue, 200 WEEK EMA Violet, DOUBLE BOLLINGER® BANDS: Normal 2 Standard Deviations Green, 1 Standard Deviation Orange.

Source: MetaQuotes Software Corp, www.fxempire.com, www.thesensibleguidetoforex.com

03 Apr. 26 22.44

Key Take-Aways Weekly Chart: Another Flat, Indecisive Week Weakens Upward Momentum

• US indexes are barely holding onto their weakening upward momentum
  • The 10 and 20 week EMAs are flattening out
  • The indexes remain at the border of their double Bollinger band buy zone
  • European indexes have lost their upward momentum, closing again in the double Bollinger®band neutral zone, and also showing flat 10 and 20 week EMAs.
  • Once again we clocked yet another indecisive ‘doji’ candle this week on the S&P 500 (the third in 5 weeks) and also in most of our other US and European indexes.

EURUSD Weekly Technical Outlook: Like Indexes, Little Changed, Tracks S&P 500 Best, Both Slightly Higher

Key Points To Note From The EURUSD Weekly Chart Below

• We continue to see a clash of bullish upward momentum versus long term bearish resistance at the 1.386 area, comprised of the price level, the downtrend line, and the 61.8% Fibonacci retracement line prior EURUSD downtrend of 2011-2012 that ended with Draghi’s OMT program announcement and the calming of fears about Spain’s banks.
• Of all of our sample global weekly index charts, the pair continues to track the S&P 500 best.
• The daily chart showed a steady rise this week in the EURUSD. We don’t present it because the overall progress was minimal and thus it sheds no additional light on the pair for anyone but very short term traders.

 

EURUSD Weekly Chart July 15 2012 -Present

KEY: 10 Week EMA Dark Blue, 20 WEEK EMA Yellow, 50 WEEK EMA Red, 100 WEEK EMA Light Blue, 200 WEEK EMA Violet, DOUBLE BOLLINGER® BANDS Normal 2 Standard Deviations Green, 1 Standard Deviation Orange