EURUSD Rates Week in Review

Last week, our technical indicators suggested to go  Short on the currency pair at or above 0.9800, setting a Stop loss at 1.0000, and Buy it at or below 0.9800, setting a Stop loss at 0.9600.

This week, EURUSD price range was 1.00 high, set this past Tuesday, and 0.9753 low, set last Monday. So, Monday, we could have Bought the currency pair at 0.9751, selling it on an intraday trading at 0.9843, for 0.94% profit. Also, Monday, we could have Short the currency pair at 0.9843, covering it on an intraday trading at 0.9751, for 0.94% profit. Tuesday, we could have Short it at 0.9998, covering it on an intraday trading at 0.9803, for 1.95% profit.  Wednesday, we could have Short it at 0.9993, covering it on an intraday trading at 0.9832, for 1.61% profit Thursday, we could have Short it at 0.9924, covering it on an intraday trading at 0.9859, for an extra 0.65% ROI.

 Fundamental Overview

After having lost nearly 100 pips on Wednesday, EURUSD has managed to hold its ground early Thursday. The pair trades in a narrow channel at around 0.9900 in the European session as investors wait for the European Central Bank (ECB) to release the accounts of its September policy meeting.

Earlier in the session, the data from Germany showed that Factory Orders declined by 2.4% on a monthly basis in August following July’s contraction of 1.1%. This reading came in much worse than the market expectation for a decrease of 0.7% but had little to no impact on the shared currency’s valuation. Additionally, Eurostat announced that Retail Sales in the euro area fell by 2% in August, compared to analysts’ estimate of -1.7%.

Following the ECB’s decision to hike its policy rate by 75 basis points in September, several ECB policymakers voiced their support for one more 75 bps increase in the next meeting. However, others argued that there were no signs of inflation expectations getting de-anchored in the eurozone and that a faster than warranted increase in key rates could weigh on the outlook. In case the ECB’s publication provides clarity regarding the size of the next hike, the euro’s market valuation could be impacted. If investors are convinced of one more 75 bps rate hike, EURUSD could gain traction and vice versa.

In the second half of the day, the US Department of Labor’s (DOL) weekly Initial Jobless Claims data will be looked upon for fresh impetus. On Wednesday, ADP reported that employment in the private sector rose by 208,000 in September, slightly better than the market projection of 200,000.  Additionally, the Employment Index component of the ISM’s Services PMI survey rose to 53 in September from 50.2 in August. These figures helped the dollar gather strength and a similar market reaction could be witnessed if the DOL reports that less than 200K people applied for unemployment benefits for the second straight week.

 Technical Analysis

EURUSD is trading little changed on the day below 0.9900 in the European session on Thursday. Eurostat reported that Retail Sales declined by 0.3% in August in the euro area but this data was largely ignored by investors who await the ECB’s meeting accounts.

EURUSD returned below the 200-period SMA on the four-hour chart and the Relative Strength Index (RSI) indicator declined toward 50, pointing to a loss of bullish momentum.

The pair was last seen trading within a touching distance of 0.9900 (psychological level, Fibonacci 23.6% retracement of the latest uptrend) and additional losses toward 0.9830 (100-period SMA, Fibonacci 38.2% retracement) and 0.9800 (psychological level) could be observed if that level is confirmed as resistance.

On the upside, 0.9920 (200-period SMA) aligns as next resistance ahead of 1.0000 (psychological level, end-point of the downtrend).

 For next week, It seems that the euro currency pair is ready to resume its downtrend, after reaching the resistance range and the downtrend line, as illustrated in the following chart.

Hence, our Technical analysis are suggesting to go Short on the currency pair at or above 0.9849, setting a Stop loss at 1.01 and Buy it at or below 0.98, setting a Stop loss at 0.96.

As of 13:54 PM (GMT+1), the EURUSD was trading at 0.98678.

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, October, 7: exchange rate 0.9799 Dollars, maximum 0.9946, minimum 0.9652. EUR to USD forecast on Monday, October, 10: exchange rate 0.9955 Dollars, maximum 1.0104, minimum 0.9806. Euro to Dollar forecast on Tuesday, October, 11: exchange rate 0.9982 Dollars, maximum 1.0132, minimum 0.9832. EUR to USD forecast on Wednesday, October, 12: exchange rate 0.9960 Dollars, maximum 1.0109, minimum 0.9811.

In 1 week, Euro to Dollar forecast on Thursday, October, 13: exchange rate 1.0049 Dollars, maximum 1.0200, minimum 0.9898. EUR to USD forecast on Friday, October, 14: exchange rate 1.0187 Dollars, maximum 1.0340, minimum 1.0034. Euro to Dollar forecast on Monday, October, 17: exchange rate 1.0176 Dollars, maximum 1.0329, minimum 1.0023. EUR to USD forecast on Tuesday, October, 18: exchange rate 1.0098 Dollars, maximum 1.0249, minimum 0.9947. Euro to Dollar forecast on Wednesday, October, 19: exchange rate 0.9943 Dollars, maximum 1.0092, minimum 0.9794.

 

 

 

 

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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