Forex Forecast: 08 – 12/06/2020

Forex Forecast: 08 - 12/06/2020

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 initiating a short position on the EURUSD between 1.10906 and 1.10202, closing the position at 1.09 or below 1.09. Hence, our technical indicator trade suggestion for this week was not triggered, as the lowest price for the week in the EURUSD was set this past Monday at 1.1095.


Fundamental Overview

The EURUSD pair reached a new multi-week high of 1.1263 early Thursday, to later stabilize around 1.1200 ahead of the ECB’s monetary policy announcement. Ahead of the event, market players retained their optimistic stance but paused high-yielding buying. Backing the upbeat mood,  The German Merkel’s coalition reached a deal on a €130 billion stimulus package, which consists of tax cuts and infrastructure spending.


Also, US Retail Sales came in better than anticipated, down by 11.7% in April when compared to a year earlier.


The pair surpassed the mentioned high after the ECB  added €600 billion in QE, but retreated as ECB’s head Lagarde began to speak, and the US published employment-related data.  The central bank’s head acknowledged that the labour market is rapidly deteriorating and that the contraction is “significant,” although she added that activity is expected to rebound in Q3.  The GBP forecasts for this year has been cut to -8.7%, while inflation was downwardly revised to 0.3% for this 2020.


In the US, job cuts announced by U.S.-based employers totalled 397,016 in May, down 40.8% from April. Initial Jobless Claims for the week ended May 29 came in slightly worse than anticipated, printing at 1.87 million. More worrisome, the Continuing Jobless Claims for the week ended May 22 were up to 21.487 million.


Technical Analysis

EURUSD is trading above 1.13, the highest since mid-March. The ECB added €600 billion in fresh stimulus, more than expected. The bank’s move joins German stimulus and hopes for a recovery.


Forex Forecast: 08 - 12/06/2020


After hitting 1.1271, the EURUSD pair is flat for the day, trading at around 1.1235. The short-term picture maintains the risk skewed to the upside, as the pair continues to develop above a bullish 20 SMA, while technical indicators have resumed their advances after correcting overbought readings. Nevertheless, the 1.1260 price zone is a tough resistance area that the pair needs to clear to be able to extend its gains.


Support levels are now set at: 1.1205, 1.1160, and 1.1120, while Resistance levels are 1.1260, 1.1300, and 1.1340.


For next week, our technical indicators suggest to be long on the EURUSD with an entry price level of 1.11670, and stop loss at 1.1005, for profit taking at 1.13615. At this stage, a short position should only be considered at or above 1.14950, according to our technical indicators reading, as illustrated in the following EURUSD chart.


Forex Forecast: 08 - 12/06/2020


EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, June, 5: exchange rate 1.1302 Dollars, maximum 1.1472, minimum 1.1132. EUR to USD forecast on Monday, June, 8: exchange rate 1.1344 Dollars, maximum 1.1514, minimum 1.1174. Euro to Dollar forecast on Tuesday, June, 9: exchange rate 1.1372 Dollars, maximum 1.1543, minimum 1.1201. EUR to USD forecast on Wednesday, June, 10: exchange rate 1.1399 Dollars, maximum 1.1570, minimum 1.1228.


Forex Forecast: 08 - 12/06/2020


In 1 week, Euro to Dollar forecast on Thursday, June, 11: exchange rate 1.1474 Dollars, maximum 1.1646, minimum 1.1302. EUR to USD forecast on Friday, June, 12: exchange rate 1.1504 Dollars, maximum 1.1677, minimum 1.1331. Euro to Dollar forecast on Monday, June, 15: exchange rate 1.1594 Dollars, maximum 1.1768, minimum 1.1420. EUR to USD forecast on Tuesday, June, 16: exchange rate 1.1585 Dollars, maximum 1.1759, minimum 1.1411. Euro to Dollar forecast on Wednesday, June, 17: exchange rate 1.1536 Dollars, maximum 1.1709, minimum 1.1363.



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.