Forex Forecast: 11 – 15 April 2022

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Long on the currency pair at or below 1.11, setting a stop loss at 1.09, and Short it at or above 1.1150, setting a stop loss at 1.13.

This week, EURUSD price range was 1.1056 high set this past Monday, and 1.0866 set today, Thursday. So, Monday, we could have bought it at 1.0962, selling it on an intraday trading at 1.1054, for 0.84% profit. Tuesday, we could have bought it at 1.09, selling it on an intraday trading at 1.0988, for 0.81% profit. Wednesday, we could have bought it at 1.09, selling it on an intraday trading at 1.0937, for 0.34% profit. Today, we could have bought it at 1.09, selling it on an intraday trading at 1.0932, for an extra 0.29% ROI.

 Fundamental Overview

EURUSD has extended its weekly slide on Wednesday and ended up closing the fifth straight trading day in negative territory. The pair managed to stage a technical correction during the Asian trading hours on Thursday but struggled to gather bullish momentum. Although the technical picture points to oversold conditions, it’s too early to count out further losses.

The minutes of the FOMC’s March meeting showed late Wednesday that many participants noted that they would have preferred a 50 basis point (bps) hike at that meeting.

Additionally, the publication confirmed that the balance sheet reduction would start after the May meeting. With the immediate market reaction, the benchmark 10-year US Treasury bond yield advanced to its strongest level in nearly three years and helped the greenback outperform its rivals.

On the flip side, European Central Bank (ECB) Chief Economist Philip Lane argued that it was important for them not to overreact to the surge in inflation. The policy divergence between the ECB and the Fed continues to widen as the European economy faces a heightened risk of recession amid the ongoing Russia-Ukraine crisis.

Meanwhile, the European Union is reportedly looking to delay the ban on Russian coal imports to mid-August from mid-July. Nevertheless, this headline doesn’t seem to be having a noticeable impact on the shared currency. Later in the day, the ECB will release the accounts of its March monetary policy meeting. Even if there is a hawkish tone in the ECB’s publication, the shared currency’s gains could remain limited because the geopolitical developments since March 10 have not been in favor of the euro.

The US economic docket will feature the weekly Initial Jobless Claims data. More importantly, several FOMC policymakers, including St. Louis Federal Reserve President James Bullard and Chicago Fed President Charles Evans will be delivering speeches.

Technical Analysis

EURUSD recovers modestly on ECB accounts and turned positive on the day near 1.0900 in the European trading hours. The accounts of the ECB’s March policy meeting revealed that a large number of members held the view that the current high level of inflation and its persistence called for immediate further steps towards policy normalization.

 

The Relative Strength Index (RSI) indicator on the above four-hour chart stays below 30, suggesting that the pair remains oversold in the near term. The descending trend line coming from late March, however, stays intact and sellers are likely to remain in control until the pair steadies above that line.

On the downside, 1.0870 (static level) aligns as interim support ahead of 08 1.0850 (static level) and 1.0800 (psychological level).

Resistances are located at 1.0920 (static level, 20-period SMA), 1.0950 (former support, static level) and 1.1000 (psychological level).

For next week, and as illustrated in the following  EURUSD chart, the currency pair is in the very short-term oversold; hence, a short-term bullish trend is more likely to resume. According to our technical analysis, we would go Long on the currency pair at or below 1.09940, setting a stop loss at 1.09, and Short it at or above 1.10, setting a stop loss at 1.1142.

 

As of 1:12 PM (GMT), the EURUSD was trading at 1.09142.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, April, 8: exchange rate 1.0895 Dollars, maximum 1.1058, minimum 1.0732. EUR to USD forecast on Monday, April, 11: exchange rate 1.0827 Dollars, maximum 1.0989, minimum 1.0665. Euro to Dollar forecast on Tuesday, April, 12: exchange rate 1.0757 Dollars, maximum 1.0918, minimum 1.0596. EUR to USD forecast on Wednesday, April, 13: exchange rate 1.0735 Dollars, maximum 1.0896, minimum 1.0574.

 

In 1 week, Euro to Dollar forecast on Thursday, April, 14: exchange rate 1.0648 Dollars, maximum 1.0808, minimum 1.0488. EUR to USD forecast on Friday, April, 15: exchange rate 1.0714 Dollars, maximum 1.0875, minimum 1.0553. Euro to Dollar forecast on Monday, April, 18: exchange rate 1.0811 Dollars, maximum 1.0973, minimum 1.0649. EUR to USD forecast on Tuesday, April, 19: exchange rate 1.0817 Dollars, maximum 1.0979, minimum 1.0655. Euro to Dollar forecast on Wednesday, April, 20: exchange rate 1.0800 Dollars, maximum 1.0962, minimum 1.0638.

 

 

 

 

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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