Last week, our technical indicators suggested going Short at or above 1.08, setting a Stop Loss at 1.095, and going Long below 1.08262, setting a Stop Loss at 1.06.

This week, EURUSD price range was 1.0832 high set this past Monday, and 1.0715 low, set today. So, Monday, we could have short the currency pair at 1.08262, covering it on an intraday trading at 1.0831, for 0.04% profit.  Also, Monday, we could have bought it at 1.0796, selling it on an intraday trading at 1.0831, for 0.32% profit. Tuesday, we could have short it at 1.0820, covering it on an intraday trading at 1.0761, for 0.55% profit. Also, Tuesday, we could have bought it at 1.0761, selling it on an intraday trading at 1.0820, for 0.55% profit. Wednesday, we could have short it at 1.0820, covering it on an intraday trading at 1.07648, for 0.51% profit.  Also, Wednesday, we could have bought it at 1.07648, selling it on an intraday trading at 1.0801, for 0.34% profit. Thursday, we could have bought it at 1.0716, selling it on an intraday trading at 1.0755, for an extra 0.36% ROI.

Fundamental Overview

EURUSD has managed to recover modestly after having touched its weakest level in two months below 1.0720. The pair’s near-term technical outlook points to oversold conditions but the Euro could have a difficult time outperforming the US Dollar (USD) unless there is a noticeable improvement in market mood.

The risk-averse market atmosphere amid a lack of progress in the US debt-ceiling negotiations provided a boost to the USD mid-week. Additionally, hawkish comments from Federal Reserve (Fed) Governor Christopher Waller caused investors to reassess the possibility of the Fed leaving its policy rate unchanged in June.

According to the CME Group FedWatch Tool, markets are currently pricing in a nearly 40% probability of one more rate hike in June, compared to less than 20% earlier in the week. Waller reiterated on Wednesday that fighting inflation continues to be his priority and noted that he would not support stopping rate increases unless there was clear evidence that inflation was moving toward the Fed’s objective of 2%.

Early Thursday, the Euro Stoxx 50 Index trades modestly higher on the day. US stock index futures, on the other hand, point to a mixed opening. S&P Futures are up 0.5% but Dow Futures are down 0.3%. In case there is a risk rally after Wall Street’s opening bell, the USD could lose interest and open the door for a rebound in EUR/USD and vice versa.

The US economic docket will feature the first-quarter Gross Domestic Product growth. Since this data will be a revision, it is unlikely to trigger a significant market reaction. Investors will also pay close attention to the weekly Initial Jobless Claims data. In case the number of first time application for unemployment benefits rise significantly, by 20K or more, the USD could come under renewed selling pressure.

Technical Analysis

EURUSD is falling toward 1.0700 in early Europe after a downward revision to Germany’s Q1 GDP. The pair also remains weighed down by the US debt-ceiling uncertainty-led cautious market mood, which buoys the safe-haven US Dollar. ECB-speak and US data eyed.

The Relative Strength Index (RSI) indicator on the four-hour chart dropped into the oversold territory below 30 on Thursday.

Additionally, EURUSD manages to hold slightly above the descending regression channel coming from early May. The upper-limit of the channel forms first resistance at 1.0750 ahead of 1.0770 (static level, 20-period Simple Moving Average (SMA)) and 1.0800 (Fibonacci 50% retracement of the latest uptrend, 50-period SMA).

On the downside, 1.0700 (psychological level) aligns as next support ahead of 1.0670 (lower-limit of the channel descending channel, static level from February).

 For next week, our technical analysis are suggesting going Short at or above 1.085, setting a Stop Loss at 1.099, and going Long below 1.08, setting a Stop Loss at 1.06.

As of 13:52 PM (GMT+1), the EURUSD was trading at 1.07169.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, May, 26: exchange rate 1.073 US Dollars, maximum 1.089, minimum 1.057. EUR to USD forecast on Monday, May, 29: exchange rate 1.069 US Dollars, maximum 1.085, minimum 1.053. Euro to US Dollar forecast on Tuesday, May, 30: exchange rate 1.070 US Dollars, maximum 1.086, minimum 1.054. EUR to USD forecast on Wednesday, May, 31: exchange rate 1.073 US Dollars, maximum 1.089, minimum 1.057.

In 1 week, Euro to US Dollar forecast on Thursday, June, 1: exchange rate 1.066 US Dollars, maximum 1.082, minimum 1.050. EUR to USD forecast on Friday, June, 2: exchange rate 1.064 US Dollars, maximum 1.080, minimum 1.048. Euro to US Dollar forecast on Monday, June, 5: exchange rate 1.063 US Dollars, maximum 1.079, minimum 1.047. EUR to USD forecast on Tuesday, June, 6: exchange rate 1.066 US Dollars, maximum 1.082, minimum 1.050. Euro to US Dollar forecast on Wednesday, June, 7: exchange rate 1.059 US Dollars, maximum 1.075, minimum 1.043.

Until next article, wishing all of you wealthy trading!

 

 

 

Disclosures: The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any interests in the EUR/USD or any other securities. This overview may include or be based in part on projections, valuations, estimates and other financial data supplied by third parties, which has not been verified by Pedro Ferreira. Any information regarding projected or estimated investment returns are estimates only and should not be considered indicative of the actual results that may be realized or predictive of the performance of the EUR/USD or any underlying security.  Further, Pedro Ferreira is not long or short in the currency pair. Past investment results of any underlying managers should not be viewed as indicative of future performance of the EUR/USD.

 

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