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EUR/USD Forecast Update 4 Dec 19

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The EUR/USD is ranging at the moment.

Technical Analysis

On the 15 minutes chart, the EUR/USD is in a range for about a day now and volatility has picked up during the London session.

On the hourly chart, the EUR/USD is ranging and we observe that it is channel bound by the bollinger bands. If the currency pair manages to push beyond the bands, we may see a breakout momentum like price action.


On the 4 hourly chart, we see a bearish decline since the earlier part of the day. We can see that the current region is a previous high and if the currency pair fails to hold on to the ground, it may be overwhelmed by bearish pressure. If this happens, it will send the EUR/USD on an attempt to test the middle bollinger band, followed by the strong sentiment and technical region of 1.1.

Lastly looking at the daily chart, we see the EUR/USD ranging since yesterday. The upper bollinger band is acting as an immediate resistance. Any downside push may see the middle bollinger band function as an immediate support, followed by 1.1. A successful bullish push will likely approach the immediate target and resistance of 1.11 followed by 1.1160.

In forex trading, it is important that we observe all time frames to get the pulse of the current situation. Shorter time frames help to ascertain the current price action and sentiments. Longer time frames allow us to understand the momentum of the current price action and sentiments, whether if it is a sustained drive or a knee jerk reaction.

Fundamental and Sentimental Considerations

The Spanish Manufacturing PMI turned out to be better than expected. Instead of reporting 46.5 which is a decline compared to the previous release, it came in at 47.5, which is an increase. The Purchasing Managers’ Index is a survey of purchasing managers and is important as the sentiment of purchasing managers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well while a cautious sentiment may see less business activities due to prudence. was much worse than expected. While anything below 50 is a contraction, the surprise increase probably showered some risk appetite, leading to a demand for risker assets such as the euro.

The USA ADP Non-Farm Employment Change is due to be released in a few hours. As ADP’s statistics is based on the payroll data of approximately 400,000 U.S. business clients, many view it as a possible early indication of the US Non-Farm Payroll result. Employment is a fundamental component of the economy as it leads to consumer spending and hence retail sales. A low unemployment rate is an indicator of a healthy functioning economy. Do ensure you are practicing proper money management for your trades due to the possibility of unexpected volatility caused by sentiment changes, especially if the result differs notably.

Here are a number of the significant economic events that are expected.

USA Crude Oil Inventories
Movement of oil supply may bring insights to the level of general economic activities. For example, an increasing supply may suggest excessive production or diminishing demand. A reducing supply on the other hand may suggest an economic pick up.

USA ISM Non-Manufacturing PMI
Purchasing Managers’ Index is a survey of purchasing managers and is important as the sentiment of purchasing managers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well while a cautious sentiment may see less business activities due to prudence.

USA Average Hourly Earnings
Consumer earnings is important due to it’s upstream impact. With more earnings comes possible increased consumer spending. This translates to revenues, leading to employment and business expansion.

USA Non-Farm Employment Change
The US Non-Farm Payroll is basically data released by the U.S. Bureau of Labor Statistics on a monthly basis that represents the total number of employed US workers, excluding the following employees:

– general government employees
– private household employees
– employees of nonprofit organizations which provide assistance to individuals
– farm employees

USA Unemployment Rate
Employment is a fundamental component of the economy as it leads to consumer spending and hence retail sales. A low unemployment rate is an indicator of a healthy functioning economy.

USA Preliminary UoM Consumer Sentiment
Consumer surveys are influential as the sentiment of consumers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well and hence consumers are confident. This likely leads to increased retail sales. A cautious sentiment on the other hand may see consumers spend less in view of a perceived upcoming economic crisis.

Following an economic calendar is vital so that your forex trading plan factors in the events. Members can log in to their dashboard for an economic calendar. The latest Major Currency Pairs, USD Index, Gold, Crude Oil and Price Action Bias Signals analysis are available too.

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Traders should always practice proper money management and seek to understand the underlying tones for the market.

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