EURUSD Weekly Outlook: And Now, The Storm After The Calm

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 (daily chart) bearish, longer term (weekly chart) neutral. See conclusions for likely range and bullish/bearish breakout points this week.
2. Fundamental Outlook: Neutral Near Term, Bearish Longer Term – see conclusions for why
3. Retail Trader Positioning: Recent shift to more long positions has bearish implications
4. Conclusions: More volatility, but in which direction? The fundamentals to watch for the near and long term, along with likely support and resistance levels.

How Did We Do Last Week? Spot On

Last week’s EURUSD forecast was neutral from both a technical and fundamental perspective. This outlook proved correct, as the pair was little changed on the week.

Some of our readers complained that the forecast was inconclusive. We replied that we “call it as we see it,” and indeed the technical and fundamental picture itself was inconclusive. Our goal is to save readers the time needed to review the technical and fundamental evidence and make conclusions based on that evidence. We have no crystal ball. If the evidence is murky, that’s what we report.

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. Compare the S&P 500 weekly chart and the EURUSD weekly charts below, and you’ll see that the pair continued this pattern last week.  

Overall Risk Appetite Per Weekly Charts Of Leading Global Stock Indexes

 Our sample of weekly charts for leading global stock indexes continues to indicate suggests a mixed technical picture, as detailed below.

EURUSD Weekly Outlook: And Now, The Storm After The Calm

Weekly Charts Of Large Cap Global Indexes With 10 Week/200 Day EMA 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

02 Mar. 29 21.33

Key Take-Aways: Overall Risk Appetite Neutral For EURUSD   

Overall risk trends for the US and Europe aren’t showing a clear, unified picture of risk appetite trends, nor does Asia shed additional light on overall risk appetite.

Note however, that the EURUSD weekly chart continues to track the S&P 500. That’s bullish because this index retains its upward momentum, though like the EURUSD itself, this index was little changed on the week.

Look at each region:

• US: Stocks and risk appetite locked in a tight 6 week trading range but retaining its upward momentum, as indicated by the S&P 500 remaining within its DOUBLE BOLLINGER BANDS
• Europe: Indexes remain in their DOUBLE BOLLINGER BANDS, suggesting neutral momentum and more range bound trading.  
• Asia: Is more of a mixed bag and so harder to make any meaningful generalizations about stocks and risk appetite.