EUR/USD Failed to Break Above Resistance Near 1.1900 Amid Forecast of Falling US Unemployment Claims
EUR/USD Weekly Outlook: 10th November 2020
Eurozone – German ZEW Economic Sentiment
On Tuesday, at GMT 10:00 a.m., the Zentrum fur Europaische Wirtschaftsforschung (ZEW) released its German economic sentiment index. It measures the level of a diffusion index based on surveying 275 German institutional investors and market analysts.
Since the professional investment community, forex brokers in the UK, investors and analysts have the latest data; their reflection about the economy tends to be the most accurate. Therefore, Forex traders consider the ZEW’s German economic sentiment index to be a leading indicator of the entire Eurozone economy. This is because the German economy is one of the most important driving forces behind the Euro currency.
Last month, the ZEW German economic sentiment came out at 52.3. This month, analysts were expecting it to come out at 43.3. However, the actual figure came out much worse, at 32.8.
United States – Unemployment Claims
On Thursday, at GMT 1:30 p.m., the US Department of Labor will release the unemployment claims figure, which measures the changes in the number of people who claimed for unemployment insurance over the last week.
Most popular CFD brokers consider the unemployment claims data to be one of the most important fundamental indicators of the US job market. This is primarily because unemployment and consumer spending have a direct correlation and an increasing number of unemployment claims indicate lower consumer spending in the economy, which makes up the bulk of the economic activity in the United States.
Last week, the US unemployment claims figure came out at 751,000. This week, analysts are expecting it to come down to 730,000.
On September 16, 2020, the EUR/USD broke below the uptrend line on the daily timeframe. Since then, it has fallen by around 300 pips. Last week, it fell to 1.1600 and found strong support. Subsequently, it started a bullish retracement and went up to test the 1.1900 level. Yesterday, the EUR/USD failed to close above the resistance near 1.1900 and formed a bearish outside bar (BEOB). Earlier today, it broke below the low of the BEOB. Currently, it is trading near yesterday’s low.
The German ZEW Economic Sentiment came down from 52.3 to 32.8. On the other hand, analysts are expecting the US unemployment rate to come down from 751,000 to 730,000. We believe it would set a bearish fundamental outlook for the EUR/USD this week. Therefore, if the EUR/USD continue to trade below the resistance near 1.1900, it would likely attract additional bearish momentum in the market.
Hence, traders should look out for trading opportunities at the EUR/USD market price.
Market Analyst / Trading Consultant . Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at email@example.com