Last week, our technical indicators suggested going Short at or above 1.09821, setting a Stop Loss at 1.1156, and going Long at or below 1.08, setting a Stop Loss at 1.06832.

This week, EURUSD price range was 1.0977 high set this past Tuesday, and 1.0880 low, set today. So, Monday, we could have short the currency pair at 1.0920 covering it on an intraday trading at 1.0888, for 0.29% profit.  Tuesday, we could have short it at 1.0976, covering it on an intraday trading at 1.0903, for 0.67% profit. Wednesday, we could have short it at 1.0962, covering it on an intraday trading at 1.0898, for 0.58% profit. Thursday, we could have short it at 1.0919, covering it on an intraday trading at 1.0881, for an extra 0.35% ROI.

Fundamental Overview

The EURUSD dropped on Wednesday, briefly reaching levels under 1.0900 and then rebounding during the American session, trimming losses. The Euro remains supported by European Central Bank (ECB) rate hike expectations, reaffirmed by Lagarde’s comments. At the same time, rising bets of a rate hike in July from the Federal Reserve (Fed) support the US Dollar.

Inflation data from the Eurozone started to roll out. The Harmonised Consumer Price Index in Italy slowed to 6.7% in June from 8%.

On Thursday, Spain and Germany will report inflation, and on Friday, the Eurozone (EZ) CPI is due. The EZ headline is expected to decline from 6.1% to 5.6%. A different report released on Wednesday showed a decline in the GfK Consumer Confidence survey, with a decline from -24.4 to -25.4. It is the first decline since October.

Despite the decline in headline inflation, ECB members continue to talk about persistent inflation and the need to do more. Speaking at the ECB Forum in Sintra, Lagarde reiterated that rates will likely rise in July. Regarding September, she said that it is “data-dependent”.

Recent better-than-expected US economic data has boosted expectations of another rate hike from the Fed at the July meeting, offering an impulse to the US Dollar. More data is due on Thursday, with Jobless Claims and the third Q1 GDP estimate.

On Friday, the Core Personal Consumption Expenditure is due and will be critical. The recent up move of the US Dollar looks stronger against Antipodean currencies but not necessarily versus the Euro, which also remains strong in the market.

Technical Analysis

EURUSD is trading on the back foot near 1.0900 after Fed Chair Powell repeated his hawkish message in a speech early Thursday. Traders refrain from placing fresh bets on the pair, awaiting the Spanish and German inflation data for fresh cues on the ECB’s rate hike path.

The EURUSD dropped on Wednesday but held above the 20-day Simple Moving Average (SMA). It continues to trade in a range, holding above 1.0900 and limited below 1.1000. Risk continues to be tilted to the upside in the daily chart; however, technical indicators are starting to turn to the downside, such as the Relative Strength Index and Momentum.

Overall, the pair shows a lack of clear direction.

On the above 4-hour chart, the bias is to the downside, with the price under the 20-period SMA, which stands at 1.0925. A slide below 1.0900 could set up the scenario for a test of the next support located at the 1.0860/65 area. If the Euro regains 1.0930, it would strengthen the outlook. The next level to watch is the dynamic resistance at 1.0960. A consolidation above 1.0960 would strengthen the outlook for the Euro, exposing the weekly high at 1.0977, the last defense for a test of 1.1000.

For next week, we expect the currency pair to fall to the specified level after reaching the resistance zone and completing the pullback to the broken trend line.

Hence, our technical analysis are suggesting going Short at or above 1.10, setting a Stop Loss at 1.11, and going Long below 1.10, setting a Stop Loss at 1.082.

As of 9:30 AM (GMT+1), the EURUSD was trading at 1.09109.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, June, 30: exchange rate 1.087 US Dollars, maximum 1.103, minimum 1.071. EUR to USD forecast on Monday, July, 3: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. Euro to US Dollar forecast on Tuesday, July, 4: exchange rate 1.093 US Dollars, maximum 1.109, minimum 1.077. EUR to USD forecast on Wednesday, July, 5: exchange rate 1.087 US Dollars, maximum 1.103, minimum 1.071.

 

In 1 week, Euro to US Dollar forecast on Thursday, July, 6: exchange rate 1.084 US Dollars, maximum 1.100, minimum 1.068. EUR to USD forecast on Friday, July, 7: exchange rate 1.091 US Dollars, maximum 1.107, minimum 1.075. Euro to US Dollar forecast on Monday, July, 10: exchange rate 1.091 US Dollars, maximum 1.107, minimum 1.075. EUR to USD forecast on Tuesday, July, 11: exchange rate 1.089 US Dollars, maximum 1.105, minimum 1.073. Euro to US Dollar forecast on Wednesday, July, 12: exchange rate 1.089 US Dollars, maximum 1.105, minimum 1.073.

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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