Forex Forecast: 1 – 5 November 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to Short the currency pair at or above 1.1685, setting a Stop Loss at 1.1750, and to go Long at or below 1.16206, setting a Stop Loss at 1.15252.
This week, EURUSD price range was 1.1666 high, set this past Monday, and 1.1582 low, set today, Thursday. So, Monday, we could have bought the currency pair at 1.1592, selling it on an intraday trading at 1.1664, for 0.62% profit. Tuesday, we could have bought it at 1.1587, selling it at 1.1624, for 0.32% profit. Wednesday, we could have bought it at 1.1587, selling it at 1.1624, for 0.32% profit. Today, we could have bought it at 1.1584, selling it at 1.1612, for an extra 0.24% ROI.
Following Monday’s decline, EURUSD has been moving sideways around 1.1600 as investors await the highly-anticipated European Central Bank (ECB) policy announcements and the US growth data.
The ECB is set to announce adjustments to its Pandemic Emergency Purchase Programme (PEPP) while leaving key rates unchanged.
Although a reduction in PEPP could be seen as a hawkish move at first glance, ECB policymakers have been downplaying inflation fears and opposing the market pricing of a 10 basis points rate hike in the second half of 2022. Moreover, major European economies have revised their 2021 growth forecasts lower lately, forcing the ECB’s hand in continuing to support the economic recovery.
European Central Bank Preview: Three reasons why Lagarde is set to lower the euro.
Unless ECB President Christine Lagarde adopts a clearly optimistic tone regarding the economic outlook or suggests that keeping price pressures under control will be the ECB’s priority, the common currency is likely to remain on the back foot against its rivals.
Due to the monetary policy divergences between, the greenback and the loonie are likely to outperform the common currency.
Meanwhile, the US Bureau of Economic Analysis will release its first estimate of the third-quarter GDP growth at 1230 GMT, when Lagarde begins her press conference. A stronger-than-expected GDP print is likely to provide an additional boost to the USD. On the other hand, a disappointing reading could force investors to reassess the Fed’s tapering timeline and cap the dollar’s gains.
EURUSD is trading in a tight range around 1.1600 amid a cautious market mood and firmer US dollar. US Treasury yields rebound from weekly lows amid global tightening spree. ECB policy decision, US GDP hold the key.
The Relative Strength Index (RSI) indicator on the four-hour chart stays relatively quiet around 50, showing that the pair is having a difficult time gathering momentum in either direction.
On the upside, 1.1620 (Fibonacci 23.6% retracement September downtrend, 50-period SMA) aligns as the first technical support before 1.1650 (20–period SMA) and 1.1670 (Fibonacci 38.2% retracement).
The initial support is located at 1.1600 (psychological level, 100-period SMA) before 1.1570 (static level) and 1.1525 (2021 low).
For next week, according to our technical analysis illustrated in the following 4-hour chart, after a sharp drop, EURUSD has been moving sideway between support and resistance levels and has started a correction phase.
Currently, price is approaching to the support level at 1.1585 after getting rejected by the resistance level at 1.1625 which has been tested several times before.
If price breaks 1.1585 and closes a bearish candle below this level, the next barrier for price is 1.1570 which is the last low and in the case of a downside breakout on this level, the next target would be around 1.1545. Hence, our technical analysis chart is recommending to Short the currency pair at or above 1.16263, setting a Stop Loss at 1.16686, and to go Long at or below 1.1550, setting a Stop Loss at 1.15252.
As of 12:32 PM (GMT+1), the EURUSD was trading at 1.16082.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, October, 29: exchange rate 1.1615 Dollars, maximum 1.1789, minimum 1.1441. EUR to USD forecast on Monday, November, 1: exchange rate 1.1600 Dollars, maximum 1.1774, minimum 1.1426. Euro to Dollar forecast on Tuesday, November, 2: exchange rate 1.1568 Dollars, maximum 1.1742, minimum 1.1394. EUR to USD forecast on Wednesday, November, 3: exchange rate 1.1583 Dollars, maximum 1.1757, minimum 1.1409.
In 1 week, EUR to USD forecast on Monday, November, 8: exchange rate 1.1491 Dollars, maximum 1.1663, minimum 1.1319. Euro to Dollar forecast on Tuesday, November, 9: exchange rate 1.1470 Dollars, maximum 1.1642, minimum 1.1298. EUR to USD forecast on Wednesday, November, 10: exchange rate 1.1487 Dollars, maximum 1.1659, minimum 1.1315. Euro to Dollar forecast on Thursday, November, 11: exchange rate 1.1508 Dollars, maximum 1.1681, minimum 1.1335. EUR to USD forecast on Friday, November, 12: exchange rate 1.1518 Dollars, maximum 1.1691, minimum 1.1345.
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.