Forex Forecast: 1 – 5 May 2023

Last week, our technical indicators suggested going Long at or below 1.0965, setting a Stop Loss at 1.0750, and going Short at or above 1.09715, setting a Stop Loss at 1.11.

This week, EURUSD price range was 1.1096 high set yesterday, Wednesday, and 1.0963 low, set this past Tuesday. So, Monday, we could have bought the currency pair at 1.0967, selling it on an intraday trading at 1.1049, for 0.75% profit. Also, Monday, we could have short it at 1.1049, selling it on an intraday trading at 1.0967, for 0.75% profit.  Tuesday, we could have bought it at 1.0965, selling it on an intraday trading at 1.1064, for 0.9% profit. Also, Tuesday, we could have short it at 1.1064, covering it on an intraday trading at 1.0965, for 0.9% profit.  Wednesday, we could have short it at 1.1094, covering it on an intraday trading at 1.0969, for 1.13% profit.  Thursday, we could have short it at 1.1061, covering it on an intraday trading at 1.1041, for an extra 0.18% ROI.

Fundamental Overview

EURUSD has retreated to the 1.1050 area after having reached its highest level in over a year near 1.1100 on Wednesday. Although the US Dollar (USD) holds its ground early Thursday following the latest selloff, the pair’s technical outlook suggest that it has the potential to continue to stretch higher in the short term.

The positive opening in Wall Street caused the USD to come under renewed selling pressure on Wednesday and the US Dollar Index (DXY) came within a touching distance of 101.00. As the benchmark 10-year US Treasury bond yield staged a rebound later in the American session to snap a two-day losing streak, however, the USD erased a portion of its losses and capped EURUSD’s upside.

Early Thursday, US stock index futures are up between 0.3% and 0.9%. Ahead of the opening bell, market participants will pay close attention to the US Bureau of Economic Analysis’ first estimate of the real Gross Domestic Product (GDP) data, which is forecast to show an annualized expansion of 2%.

This data is unlikely to significantly influence the market pricing of a 25 basis points (bps) Federal Reserve (Fed) rate hike at next week’s policy meeting. Nevertheless, a weaker-than-expected growth reading for Q1 could revive fears over the US economy tipping into recession. In turn, the “policy pivot” narrative could gain traction and trigger a fresh leg off USD selloff.

On the other hand, an upbeat GDP print should help the USD stay resilient against its rivals. Nevertheless, the USD’s gains are likely to remain limited if risk flows dominate the financial markets.

Technical Analysis

EURUSD is holding gains above 1.1050, consolidating the pullback from 13-month highs of 1.1095 on Thursday. The pair is underpinned by a broadly subdued US Dollar and cautious optimism. All eyes remain on the US advance Q1 GDP release.

The Relative Strength Index (RSI) indicator on the four-hour chart holds near 60, suggesting that EUR/USD has more room on the upside before turning technically overbought. Moreover, the pair closed the last six four-hour candle above the 20-period Simple Moving Average, reflecting the buyers’ willingness to retain control.

On the upside, 1.1070 (end-point of the latest uptrend) aligns as initial resistance ahead of 1.1100 (psychological level, 13-month high set on Wednesday) and 1.1160 (static level from March 2022).

1.1025 (20-period SMA) forms dynamic support before 1.1000 (psychological level, static level). A four-hour close below the latter could discourage buyers and open the door for an extended slide toward 1.0970 (100-period SMA).

 For next week, EURUSD is approaching a strong horizontal resistance, for the third time. The price is rebounding above 1.1000, as bears take a breather. The pair is benefiting from the latest retreat in the US Dollar amid a recovery in risk sentiment and ahead of US Durable Goods data. We will be monitoring the currency pair, for a selling opportunity, once it gets to the resistance above 1.10749 – 1.10531.

Hence, our technical analysis are suggesting going Short at or above 1.10189, setting a Stop Loss at 1.11, and going Long at or below 1.09850, setting a Stop Loss at 1.0850.

As of 12:17 PM (GMT+1), the EURUSD was trading at 1.09717.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, April, 28: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095. EUR to USD forecast on Monday, May, 1: exchange rate 1.105 US Dollars, maximum 1.122, minimum 1.088. Euro to US Dollar forecast on Tuesday, May, 2: exchange rate 1.111 US Dollars, maximum 1.128, minimum 1.094. EUR to USD forecast on Wednesday, May, 3: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095.

In 1 week, Euro to US Dollar forecast on Thursday, May, 4: exchange rate 1.114 US Dollars, maximum 1.131, minimum 1.097. EUR to USD forecast on Friday, May, 5: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095. Euro to US Dollar forecast on Monday, May, 8: exchange rate 1.117 US Dollars, maximum 1.134, minimum 1.100. EUR to USD forecast on Tuesday, May, 9: exchange rate 1.110 US Dollars, maximum 1.127, minimum 1.093. Euro to US Dollar forecast on Wednesday, May, 10: exchange rate 1.105 US Dollars, maximum 1.122, minimum 1.088.

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.

 

May 1, 2023Tags: Brokerage, forextrading, mam, multiaccountmanagement, PAMM, weeklyforecast