Last week, our technical indicators suggested going Short at or above 1.085, setting a Stop Loss at 1.0955, and going Long at or below 1.075, setting a Stop Loss at 1.065.

This week, EURUSD price range was 1.0974 high set this past Tuesday, and 1.0788 low set this past Monday. So, Monday, we could have short the currency pair at 1.0916, covering it on an intraday trading at 1.0790, for 1.15% profit. Tuesday, we could have short the currency pair at 1.0955, covering it on an intraday trading at 1.0885, for 0.64% profit.  Wednesday, we could have short the currency pair at 1.0955, covering it on an intraday trading at 1.0893, for 0.57% profit.  Thursday, we could have short it at 1.0919, covering it on an intraday trading at 1.0886, for an extra 0.3% ROI.

Fundamental Overview

The EURUSD retreated on Wednesday, falling from the highest daily close in two months, making it all the way to sub-1.0900 levels. The slide took place despite weaker-than-expected US data and amid a rally in government bonds.

US and European yields dropped on Wednesday. The slide in Europe was more significant and weighed on the Euro. The German 10-year yield fell from 2.28% to 2.18%; the lowest since March 27. The 10-year Treasury Bond yield dropped to 3.26%, the lowest since September.

The US Dollar appreciated against European currencies on Wednesday, despite US data. The ADP Employment report showed private payrolls rose by 145K in March, below the 200K of markets consensus. The ISM Service PMI fell to 51.2 versus estimates of 54.5 in the same period. More US data is coming on Thursday with Jobless Claims ahead of Friday’s Nonfarm Payrolls. However, subdued trade is expected ahead of the Easter holidays.

The final Eurozone March S&P Global Service PMI was revised lower from the preliminary 55.6 to 55.0. German reported that Factory Orders rose 4.8% in February, well above expectations of a 0.3% increase. Germany will report Industrial Production on Thursday and could surprise again to the upside.

“The biggest part of the cycle of rate raises is behind us” mentioned European Central Bank’s Boris Vujcic and later explained, that if core inflation remains above 4%, more hikes can be expected. ECB Philip Lane said that inflation is at its most intense in food. Despite comments and the global outlook, markets continue to see a rate hike at the next ECB meeting on May 4.  Federal Reserve’s Loretta Mester said on Wednesday that they should move the key rate above 5% and hold in restrictive territory for some time to quell inflation. While the bond market continues to point to rate cuts later in 2023, central banks are not considering that scenario, and continue to talk about the need for a tight policy until inflation is back under control.

Technical Analysis

EURUSD is trading close to 1.0900 early Thursday, consolidating a short series of daily bullish closes. Risk-aversion is underpinning the US Dollar recovery, despite a run of weak US data. Upbeat German Industrial Output data fails to impress.

Despite the slide, the daily chart for the EURUSD shows the price developing firmly above the bullish 20 and 100 Simple Moving Averages (SMA), still looking to test the 1.1000 psychological level. Technical indicators lost bullish momentum, with the RSI moving south slowly, after approaching 70.

The 4-hour chart for EURUSD also shows price well above relevant moving averages. The 20-period offers support at 1.0890. A consolidation below would point to an extension of the correction, targeting the 1.0860 zone. Below, a critical dynamic support emerges at 1.0840 (uptrend line). The Euro has lost bullish momentum, and technical indicators favor consolidation ahead. However, a firm return above 1.0930 would expose recent highs.

 For next week, we expect this pair to enter correction after growing up to the resistance zone and fall to the specified zone.

Hence, our technical analysis are suggesting going Long at or below 1.09, setting a Stop Loss at 1.0684, and going Short at or below 1.09230, setting a Stop Loss at 1.11852.

As of 09:44 AM (GMT+1), the EURUSD was trading at 1.09027.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, April, 7: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070. EUR to USD forecast on Monday, April, 10: exchange rate 1.091 US Dollars, maximum 1.107, minimum 1.075. Euro to US Dollar forecast on Tuesday, April, 11: exchange rate 1.097 US Dollars, maximum 1.113, minimum 1.081. EUR to USD forecast on Wednesday, April, 12: exchange rate 1.091 US Dollars, maximum 1.107, minimum 1.075.

 

 

In 1 week, Euro to US Dollar forecast on Thursday, April, 13: exchange rate 1.097 US Dollars, maximum 1.113, minimum 1.081. EUR to USD forecast on Friday, April, 14: exchange rate 1.097 US Dollars, maximum 1.113, minimum 1.081. Euro to US Dollar forecast on Monday, April, 17: exchange rate 1.101 US Dollars, maximum 1.118, minimum 1.084. EUR to USD forecast on Tuesday, April, 18: exchange rate 1.105 US Dollars, maximum 1.122, minimum 1.088. Euro to US Dollar forecast on Wednesday, April, 19: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082.

 

Until next article, wishing all of you a wonderful Easter filled with joy and blessings!

 

 

 

 

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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