Forex Forecast: 11 – 15 July 2022

 

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on EURUSD at or above 1.06, setting a Stop Loss at 1.07, and to go Long at or below 1.05, setting a Stop Loss at 1.03.

This week, EURUSD price range was 1.0464 high, set this past Monday, and 1.0161 low, set yesterday, Wednesday. Have we followed our trading discipline, this week, so far, we had two trading opportunities. Monday, we could have bought the currency pair at 1.0419, selling it on an intraday trading at 1.0462, for 0.41% profit. Tuesday, we could have bought it at 1.03, selling it on an intraday trading at 1.0448, for an extra 1.44% ROI.

 Fundamental Overview

EURUSD has gone into a consolidation phase after having plunged to its weakest level since December 2002 at 1.0161 on Wednesday. Unless the pair manages to rise above 1.0200 and start using that level as support, additional losses could be witnessed in the near term.

Relentless dollar buying amid recession fears continued on Wednesday and the US Dollar Index reached its strongest level in nearly two decades above 107.00. The minutes of the Federal Reserve’s June policy meeting showed late Wednesday that policymakers reiterated high inflation warranted ‘restrictive’ interest rates, with the possibility of a ‘more restrictive stance’ if inflation persists.

With risk flows returning to markets in the European trading hours, the greenback is having a difficult time gathering further strength and allowing EURUSD to stay relatively calm.

Later in the session, the European Central Bank will release the Monetary Policy Meeting Accounts for June. According to Reuters, the market positioning shows that the ECB is now expected to hike its policy rate by a total of 135 basis points by the end of the year, compared to 190 bps in mid-June. Investors are reassessing the ECB’s rate outlook as the energy crisis is expected to cause the economy to tip into recession.

In the second half of the day, the US economic docket will feature the weekly Initial Jobless Claims and May Goods Trade Balance data. In case Wall Street’s main indexes stage a decisive rebound, EURUSD losses could remain limited. The pair, however, is unlikely to break out of its downtrend in the current market environment.

Technical Analysis

EURUSD is holding onto the latest advance above 1.0200, despite the mixed German Industrial Production data. The US dollar corrects from over two-decade highs amid an improvement in risk sentiment. All eyes are on the EU forecasts and ECB accounts.

 

EURUSD remains technically oversold in the short term with the Relative Strength Index (RSI) indicator staying below 30. 1.0200 (psychological level, static level) aligns as initial resistance and in case the pair manages to flip that level into support, it could extend its recovery toward 1.0250 (upper limit of the descending regression channel, static level).

On the downside, 1.0160 (multi-decade low set on Wednesday) forms interim support ahead of 1.0130 (static level from November 2002, former resistance) and 1.0100.

 For next week, will it be the week for the currency pair to reach parity? Our technical analysis are suggesting to go Short on EURUSD at or above 1.03, setting a Stop Loss at 1.05, and go Long at or below 1.02, setting a Stop Loss at 1.00.

 

As of 11:35 AM (GMT), the EURUSD was trading at 1.02035.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, July, 8: exchange rate 1.0111 Dollars, maximum 1.0263, minimum 0.9959. EUR to USD forecast on Monday, July, 11: exchange rate 0.9956 Dollars, maximum 1.0105, minimum 0.9807. Euro to Dollar forecast on Tuesday, July, 12: exchange rate 0.9962 Dollars, maximum 1.0111, minimum 0.9813. EUR to USD forecast on Wednesday, July, 13: exchange rate 0.9907 Dollars, maximum 1.0056, minimum 0.9758.

 

In 1 week, Euro to Dollar forecast on Thursday, July, 14: exchange rate 0.9944 Dollars, maximum 1.0093, minimum 0.9795. EUR to USD forecast on Friday, July, 15: exchange rate 0.9865 Dollars, maximum 1.0013, minimum 0.9717. Euro to Dollar forecast on Monday, July, 18: exchange rate 0.9810 Dollars, maximum 0.9957, minimum 0.9663. EUR to USD forecast on Tuesday, July, 19: exchange rate 0.9837 Dollars, maximum 0.9985, minimum 0.9689. Euro to Dollar forecast on Wednesday, July, 20: exchange rate 0.9869 Dollars, maximum 1.0017, minimum 0.9721.

 

 

 

 

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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