Forex Forecast: 05 – 09/10/2020
How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement
EURUSD Rates Week in Review
Last week, our technical indicators suggested going long on the EURUSD at or below 1.1676. Hence, this past Monday we could have bought the EURUSD at 1.1615, selling it Tuesday at 1.17.46 for 1.13% gain. Tuesday, we could have bought it at 1.1660, selling it today, Thursday at 1.1770 for an extra 0.94% ROI.
The EURUSD pair jumped to 1.1769 in a quite volatile European session. Headlines related to a US coronavirus aid package and Brexit have shaken the FX board, although, at the time being, the market’s mood is upbeat, amid hopes both conflicts will reach safe ports. As long as risk-on prevails, the greenback will remain under selling pressure.
The shared currency is up, despite some weak macroeconomic figures released earlier in the day. The EU unemployment rate resulted at 8.1% in August as expected, rising for a fifth consecutive month. Also, the final versions of Markit PMIs for the Union suffered revisions, with the German index down to 56.4 from 56.6 previously estimated. The index for the EU remained unchanged at 53.7.
Ahead of Wall Street’s opening, the US has just released Initial Jobless Claims for the week ended September 25, which printed at 837K, better than the 850K expected. Personal Spending was up 1.0% in August, beating expectations although Personal Income in the same month fell 2.7%. The core PCE inflation in the country was up to 1.6% from 1.4%, beating expectations. The market is now waiting for the official ISM Manufacturing PMI, foreseen in September at 56.3.
EURUSD chops lower amid conflicting fiscal stimulus headlines, mixed data. The EURUSD is trading below 1.1750, off the highs. Contradicting reports about progress in US fiscal stimulus talks is pushing and pulling the dollar and markets. Cautious optimism barely prevails. The ISM Manufacturing PMI missed on the headline but beat in the employment component.
The EURUSD pair is bullish in the short-term, trading near the 61.8% retracement of its latest daily decline. The risk is skewed to the upside, according to technical readings in the above 4-hour chart, but still needs to accelerate above the mentioned daily high to confirm a new leg north.
In the mentioned time-frame, the 20 SMA maintains its bullish slope below the current level, while the 100 SMA heads lower around the mentioned daily high. Technical indicators, in the meantime, have turned higher, but the momentum remains limited.
Support levels are at 1.1720, 1.1670, and 1.1625. Resistance levels are at 1.1770, 1.1810, and 1.1850.
For next week and as shown in the following EURUSD chart, our technical indicatrors illustrate a negative regressive analysis trend line, predicting lower future EURUSD prices. Therefore, our technical indicators suggest to go go shorth on the EURUSD between 1.18 and 1.1740, setting a stop loss at 1.18473.
As of 5:24 PM (GMT+1), the EURUSD was trading at 1.17469.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, October, 2: exchange rate 1.1705 Dollars, maximum 1.1881, minimum 1.1529. EUR to USD forecast on Monday, October, 5: exchange rate 1.1787 Dollars, maximum 1.1964, minimum 1.1610. Euro to Dollar forecast on Tuesday, October, 6: exchange rate 1.1826 Dollars, maximum 1.2003, minimum 1.1649. EUR to USD forecast on Wednesday, October, 7: exchange rate 1.1780 Dollars, maximum 1.1957, minimum 1.1603.
In 1 week, Euro to Dollar forecast on Thursday, October, 8: exchange rate 1.1761 Dollars, maximum 1.1937, minimum 1.1585. EUR to USD forecast on Friday, October, 9: exchange rate 1.1739 Dollars, maximum 1.1915, minimum 1.1563. Euro to Dollar forecast on Monday, October, 12: exchange rate 1.1702 Dollars, maximum 1.1878, minimum 1.1526. EUR to USD forecast on Tuesday, October, 13: exchange rate 1.1579 Dollars, maximum 1.1753, minimum 1.1405. Euro to Dollar forecast on Wednesday, October, 14: exchange rate 1.1621 Dollars, maximum 1.1795, minimum 1.1447.
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 nor KeySoft. 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 the future performance of the EUR/USD.