EUR/USD Tests Key Support Near Amid Forecast of Improving Unemployment Claims in the US

Last Updated on February 18, 2021

EUR/USD Outlook – 17th February 2021

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.

Top 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 793,000. This week, analysts are expecting it to come down to 775,000.

Eurozone – German Flash Manufacturing PMI

On Friday, at GMT 8:30 a.m., the Markit will release the German Flash Manufacturing PMI data. It measures the level of a diffusion index based on surveying around 500 purchasing managers in the country. 

CFD traders consider the Flash Manufacturing PMI figure to be a leading indicator of the German economic climate. Because purchasing managers usually have insight regarding business conditions such as employment, production capacity and new bulk orders and inventory situation.

Last month, the German Flash Manufacturing PMI figure came out at 57.1. This month, analysts are expecting it to come out at 56.6.

EUR/USD Forecast

EUR/USD Chart - 16th Feb 2021

Since October 20, 2020, the EUR/USD remained bearish and formed a downtrend line. Over the last few months, it broke below the key supports near 1.6200 and 1.5600. After closing below 1.5600 on February 15, 2021, it tested this pivot zone. So far, it appears that bears are in control. Currently, the EUR/USD  is trading just below the pivot zone around 1.5600.

The Australian MI Leading Index increased by 0.3%. By contrast, analysts are expecting the German Flash Manufacturing PMI to go down from 57.1 to 56.6. We believe it would set a bearish fundamental outlook for the EUR/USD this week. Therefore, if the EUR/USD remains below the pivot zone near 1.5600, it would likely attract additional bearish momentum in the market.

Hence, CFD traders should look out for trading opportunities below this major resistance level around 1.5600.

Market Analyst / Trading Consultant at Asif Imtiaz
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 contact@asifimtiaz.com
Asif Imtiaz

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