Last week, our technical indicators suggested going Long at or below 1.08470 setting a Stop Loss at 1.07877, and going Short at or above 1.08471, setting a Stop Loss at 1.109.
This week, the EURUSD price range was 1.0917 high, set this past Tuesday, and 1.0826 low, set this past Monday. So, on Monday, we could have bought the currency pair at 1.0827, selling it on an intraday trading at 1.0904, for 0.71% profit. Also, on Monday, we could have short it at 1.0904, covering it on an intraday trading at 1.08471, for 0.18% profit. Tuesday, we could have short it at 1.0916, covering it on an intraday trading at 1.0860, for 0.52% profit. Wednesday, we could have short it at 1.0891, covering it on an intraday trading at 1.0855, for 0.33% profit. Thursday, we could have short it at 1.0895, covering it on an intraday trading at 1.0872, for an extra 0.21% ROI.
Fundamental Overview
The EURUSD registered small losses on Wednesday but managed to hold comfortably above 1.0850. The pair fluctuates in a narrow channel below 1.0900 as investors await the European Central Bank’s (ECB) monetary policy announcements.
The ECB is widely expected to cut key interest rates by 25 bps following the June policy meeting. Since numerous ECB policymakers clearly communicated that they were intending to lower key rates in June, this decision by itself might not trigger a noticeable market reaction. Hence, investors will pay close attention to changes in the statement language and comments from President Christine Lagarde in the post-meeting press conference.
In case Lagarde adopts an optimistic tone about the inflation outlook and leaves the door open to additional rate reductions in the upcoming meetings, the initial reaction could trigger a Euro selloff and cause EUR/USD to turn south.
On the other hand, the Euro could gather strength if Lagarde reiterates the data-dependent approach and refrains from committing to further policy easing later in the year.
The US economic docket will feature weekly Initial Jobless Claims data in the second half of the day. Ahead of Friday’s May jobs report, investors are unlikely to react to this data.
Technical Analysis
EURUSD holds positive ground above 1.0850 ahead of ECB rate decision.
The European Central Bank will announce monetary policy decisions and President Christine Lagarde will speak on the policy outlook in a press conference later in the day.
In the following chart, we notice the currency pair trades in the lower half of the ascending regression channel and the Relative Strength Index (RSI) indicator on the 4-hour chart stays near 50, reflecting the pair’s indecisiveness.
1.0850-1.0840 (100-period Simple Moving Average (SMA), lower limit of the ascending channel) aligns as first support before 1.0800-1.0790 (psychological level, static level, 200-period SMA) and 1.0760 (static level). On the upside, resistances could be seen at 1.0900 (mid-point of the ascending channel, static level), 1.0950 (upper limit of the ascending channel) and 1.0970 (upper limit of the ascending channel).
For next week, we foresee a Buying opportunity in the EURUSD with a target at 1.09800 for a profit of 100 pips. After, knowing the worse than expected data from the JOLTs survey of job offers, buying pressure has been added.
Yesterday, in the derivatives market we saw a large volume of call options with strike 1.10000, so we set a target between the 1.09750 – 1.10000 zone.
Hence, our technical analysis is suggesting going Long at or below 1.08700 setting a Stop Loss at 1.07995, and going Short at or above 1.08710, setting a Stop Loss at 1.10.
As of 10:32 AM (GMT+1), the EURUSD was trading at 1.08776.
EUR to USD forecast for tomorrow Euro to US Dollar forecast on Thursday, June, 6: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070. EUR to USD forecast on Friday, June, 7: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. Euro to US Dollar forecast on Monday, June, 10: exchange rate 1.094 US Dollars, maximum 1.110, minimum 1.078. EUR to USD forecast on Tuesday, June, 11: exchange rate 1.097 US Dollars, maximum 1.113, minimum 1.081.
In 1 week, Euro to US Dollar forecast on Wednesday, June, 12: exchange rate 1.091 US Dollars, maximum 1.107, minimum 1.075. EUR to USD forecast on Thursday, June, 13: exchange rate 1.091 US Dollars, maximum 1.107, minimum 1.075. Euro to US Dollar forecast on Friday, June, 14: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. EUR to USD forecast on Monday, June, 17: exchange rate 1.095 US Dollars, maximum 1.111, minimum 1.079. Euro to US Dollar forecast on Tuesday, June, 18: exchange rate 1.094 US Dollars, maximum 1.110, minimum 1.078.
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.
