Forex Forecast: 07 – 11/12/2020
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 short on the currency pair at or above 1.18991, setting a stop loss at 1.19834, and to go long at or below 1.17.
Throughout this week, the EURUSD price range was between 1.2141 and 1.1924. So this past Monday, we could have short the EURUSD on an intraday trading at 1.2004, covering it at 1.1924, realizing 0.67% ROI. Tuesday, we could have short it at 1.2077, covering it on an intraday trading at 1.1926, for 1.25% gain. Wednesday, we could have short it on an intraday trading at 1.2119, covering it at 1.2040, for a 0.65% profit, and today Thursday, we could have short it at 1.2141, closing the short position at 1.2101 for an extra 0.33% ROI.
The USD failed to gain any respite and remained depressed following the release of ADP report, which showed that private-sector employers added 307K jobs in November as against 410K anticipated. On the other hand, the shared currency got an additional boost from better-than-expected German Retail Sales figures and seemed rather unaffected by expectations that the European Central Bank will enhance its quantitative easing program next week.
Nevertheless, the pair ended near the top end of its daily trading range and edged higher for the third consecutive session on Thursday. The uptick marked the fourth day of a positive move in the previous five and pushed the pair to fresh 32-month tops during the Asian session. Market participants now look forward to the final version of the Eurozone Services PMI prints and the US economic releases – Initial Jobless Claims and ISM Non-Manufacturing PMI.
The data, along with the broader market risk sentiment, will influence the USD price dynamics and produce some short-term trading opportunities during the early North American session. The key focus, however, will remain on Friday’s release of the closely watched US monthly jobs report, popularly known as NFP.
EURUSD is off the fresh 32-month high of 1.2134. The safe-haven dollar is under pressure amid hopes for US fiscal stimulus and an upcoming vaccine. Investors are shrugging off Germany’s extended restrictions and pre-NFP US data are eyed.
From a technical perspective, the pair this week confirmed a fresh bullish breakout through the 1.2010-15 resistance zone and seems poised to prolong its upward trajectory. The emergence of some dip-buying on Wednesday further reinforced the positive outlook.
That said, overbought conditions on hourly/daily charts warrant some caution for aggressive bullish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest pullback before positioning for any further near-term appreciating move.
Meanwhile, any meaningful dip below the 1.2100 mark might attract some dip-buying around the 1.2075-70 horizontal zone. This, in turn, should help limit the downside near the overnight swing lows, around the 1.2040 region. On the flip side, bulls might now aim to reclaim the 1.2200 round-figure mark before eventually pushing the pair further towards the next major hurdle near the 1.2235-40 zone.
For next week, as illustrated in the following 4-hour EURUSD chart, our technical analysis indicators suggest an overbought condition (RSI). Further, the strong resistance break-out at 1.20861 should in the short-term make the currency pair drop further. Hence, our technical indicators suggest initiating a strong short position at or above 1.20861, setting a stop loss at 1.22.
As of 1:15 PM (GMT), the EURUSD was trading at 1.21485.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, December, 4: exchange rate 1.2170 Dollars, maximum 1.2353, minimum 1.1987. EUR to USD forecast on Monday, December, 7: exchange rate 1.2314 Dollars, maximum 1.2499, minimum 1.2129. Euro to Dollar forecast on Tuesday, December, 8: exchange rate 1.2278 Dollars, maximum 1.2462, minimum 1.2094. EUR to USD forecast on Wednesday, December, 9: exchange rate 1.2334 Dollars, maximum 1.2519, minimum 1.2149.
In 1 week, Euro to Dollar forecast on Thursday, December, 10: exchange rate 1.2334 Dollars, maximum 1.2519, minimum 1.2149. EUR to USD forecast on Friday, December, 11: exchange rate 1.2350 Dollars, maximum 1.2535, minimum 1.2165. Euro to Dollar forecast on Monday, December, 14: exchange rate 1.2409 Dollars, maximum 1.2595, minimum 1.2223. EUR to USD forecast on Tuesday, December, 15: exchange rate 1.2395 Dollars, maximum 1.2581, minimum 1.2209. Euro to Dollar forecast on Wednesday, December, 16: exchange rate 1.2377 Dollars, maximum 1.2563, minimum 1.2191.
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.