Forex Forecast: 07 – 11/09/2020
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 to go long on the currency pair between 1.18122 and 1.18004, and short it between 1.19287 and 1.18724. Hence and throughout this week, we had several opportunities to trade the currency pair on the short side. Monday, we could have short it on an intraday trading at 1.1967 and bought it back at 1.1883, profiting 0.7%, Tuesday, we could have short it at 1.2012, closing the short position at 1.1901, gainning an extra 0.92%, and Wednesday, we could have short it at 1.1931, and bought it back at 1.1822, locking in an extra profit of 0.91%.
During the European session, Markit released the final versions of the Services PMIs for the Union, with most of them suffering downward revisions. Worth mention, services output in Italy and Spain fell into contraction territory.
However, the German index was upwardly revised to 52.5 from 50.8. The final EU figure was also better than initially estimated, revised from 50.1 to 50.5. Meanwhile, EU Retail Sales were down 1.3% MoM in July and up by 0.4% when compared to a year earlier, missing the market’s expectations.
The US has just published some encouraging employment-related numbers, as Initial Jobless Claims for the week ended August 28 decreased to 881K, the lowest reading since the beginning of lockdowns back in March. Nonfarm Productivity in Q2 improved 10.1%, beating expectations, although Unit Labor Cost in the same quarter was down to 9% from12.2% in the previous quarter.
EURUSD seems to be stabilizing on lower ground after upbeat US data.
EURUSD is trading below 1.1850, settling lower after the encouraging drop in US jobless claims and the upbeat ISM Services PMI. Tension is mounting ahead of Friday’s Non-Farm Payrolls.
The dollar came under mild pressure with the encouraging news, helping EURUSD to recover to the current 1.1830 price zone. Still trading in the red daily basis, the 4-hour chart shows that the risk is still skewed to the downside, as the pair trades below its 20 and 100 SMA, with the shortest gaining bearish traction.
The Momentum indicator, in the meantime, retains its strong bearish slope well into negative territory, while the RSI indicator has turned flat around 40.
Support levels are at 1.1790, 1.1755, and 1.1710, while Resistance levels are at 1.1840, 1.1880, and 1.1925.
For next week and as shown in the following EURUSD weekly chart, our technical indicators suggest to go short at or above 1.18179, with a buyback target of 1.16916.
As of 7:54 PM (GMT+1), the EURUSD was trading at 1.1858.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, September, 4: exchange rate 1.1824 Dollars, maximum 1.2001, minimum 1.1647. EUR to USD forecast on Monday, September, 7: exchange rate 1.1740 Dollars, maximum 1.1916, minimum 1.1564. Euro to Dollar forecast on Tuesday, September, 8: exchange rate 1.1724 Dollars, maximum 1.1900, minimum 1.1548. EUR to USD forecast on Wednesday, September, 9: exchange rate 1.1774 Dollars, maximum 1.1951, minimum 1.1597.
In 1 week, Euro to Dollar forecast on Thursday, September, 10: exchange rate 1.1874 Dollars, maximum 1.2052, minimum 1.1696. EUR to USD forecast on Friday, September, 11: exchange rate 1.1835 Dollars, maximum 1.2013, minimum 1.1657. Euro to Dollar forecast on Monday, September, 14: exchange rate 1.1854 Dollars, maximum 1.2032, minimum 1.1676. EUR to USD forecast on Tuesday, September, 15: exchange rate 1.1866 Dollars, maximum 1.2044, minimum 1.1688. Euro to Dollar forecast on Wednesday, September, 16: exchange rate 1.1896 Dollars, maximum 1.2074, minimum 1.1718.
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.