Commence your trading day with the weekly EURUSD technical analysis for August 22-26. Not only does it include the recap of last week’s European and US fundamental developments, but also the special outlook for the upcoming week. What can we expect for EURUSD?
22 August, AtoZForex – The following are my Forex technical analysis for this week of August for the major pair EURUSD.
Weekly EURUSD technical analysis
Major Resistances at 1.1366 ( Aug 18 high), 1.1382 (Jun 20 high) and 1.1428 (Jun 24 high).
Major Supports at 1.1284 (Aug 18 low), 1.1192 (100-day SMA) and 1.1153 (Aug 15 low).
Last Week Recap
EURUSD surged high up to 1.1360 level for four straight days, but the dollar reclaimed strength last Friday following hawkish comments from San Francisco Fed President Williams who is in favor for September rate hike. The week recorded with a low of 1.1153 and a high of 1.1366 giving 213 pips swing high. This is relatively low volatile trading week compared to previous weeks.
What to expect this week
For Euro currency, the leaders from Italy, Germany and France will meet on ahead of September’s EU summit called to discuss repercussion of Brexit referendum. This is to promote unity among the 3 biggest members of Europe and prepare for the upcoming Bratislava summit.
Faced with diverseness, the three leaders differ over how to boost economic growth. German Chancellor Merkel wants to have “a better Europe” indicating domestic growth rather than forge with “more Europe”. PM Renzi of Italy wants to review how of each the union members are voting, in terms to avoid a potential Brexit. Whereas French PM Hollande wants an EU-wide investment plan to be doubled. Renzi is eager for greater European expansion in the wake of Brexit, but Merkel is more concerned about preserving the integrity of the eventual 27-member bloc.
For US Dollar, the main focus is the scheduled speech of Fed Chair Janet Yellen which may give a better direction if the central bank will keep interest rates lower for longer or will proceed with rate hike by September. Aside from San Francisco Fed president, it was earlier stated by New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart that the U.S. economy is recovering quite well and the committee should soon consider a gradual rate hike that it began last December.
Although San Francisco Fed President Williams does not have a vote on Fed policy this year, his views are influential on the policy-setting committee because of his research-driven style and longstanding relationship with Fed Chair Janet Yellen which was his former boss at the San Francisco Fed.
Technically, the momentum of the currency pair is bullish. The MACD line is above 0 with an upward sloping trajectory which points to higher prices. Should we see a hawkish statement from Fed Chairman Yellen, we may see the pair revisit the 61.8 Fibonacci retracement level at 1.1102.
Think we missed something? Let us know in the comments section below.