Forex Forecast: 11 – 15 October 2021

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Long on the currency pair at or below 1.1650, setting a Stop Loss at 1.17, and Short it at or above 1.1750, setting a Stop Loss at 1.1875.

This week, EURUSD price range was 1.1641 high, set this past Monday, and 1.1529 low, set yesterday, Wednesday. So, Monday, we could have bought the currency pair at 1.1589, selling it on an intraday trading at 1.1639, for 043% profit. Tuesday, we could have bought it at 1.1582, selling it at 1.1621, for 0.34% ROI. Wednesday, we could have bought it at 1.1531, selling it at 1.1603, for 0.62% profit. Today, Thursday, we could have bought it at 1.1550, selling it on an intraday trading at 1.1571, for an extra 0.18% ROI.

Fundamental Overview

The EURUSD pair is marginally higher on a daily basis, as the market mood remains positive following news that US Senate Republican Leader Mitch McConnell offered a temporary solution to the debt crisis on Wednesday.

The governing body will vote on the proposal during the American afternoon. As a result, stocks trade within positive levels, while demand for government bonds receded.

Generally speaking, the dollar is weaker across the board, although the upside for the shared currency is being limited by dismal local data.

Germany published August Industrial Production, which fell by 4% MoM, much worse than the -0.4% expected. The annual reading was 1.7%, well below the 11.4% expected.

The US published September Challenger Job Cuts, which rose 14% to 17,895 from the 24-year low of 15,723 cuts announced in August. Also, Initial Jobless Claims for the week ended October 1 printed at 326K, better than the 348K expected.

 Technical Analysis

EURUSD pares recovery gains as rising US T-bond yields support the dollar. Indeed, the EURUSD lost its momentum after climbing above 1.1570 and returned to the 1.1550 area in the American today’s early session, Thursday. In the absence of high-tier data releases, rising US Treasury bond yields support the greenback and make it difficult for the pair to stay afloat in the positive territory.

 

The EURUSD pair peaked at 1.1571 but currently trades in the 1.1550 price zone, retaining its bearish stance. The above 4-hour chart shows that the pair remains below a firmly bearish 20 SMA, which currently stands at around 1.1580, providing dynamic resistance.

The Momentum indicator advanced within negative levels, although the RSI turned lower near oversold readings, indicating persistent selling interest. The pair will likely resume its slide on a break below 1.1520, the immediate support level.

Support levels are at 1.1520, 1.1475, and 1.1440. Resistance levels are at 1.1580, 1.1640, and 1.1685.

 For next week, and as you may see in the following chart, EURUSD followed the fractal precisely as the 1W MA50 was never recovered from its last rejection and the price made consecutive Lower Lows. Further, on the August 13 2018 1W candle, EURUSD broke marginally below the 1W MA-200 (orange trend-line) but recovered instantly on the same week and that initiated a rally (or dead-cat bounce if you like) back near the previous Resistance (1.18575), still below the 1W MA-50. Then the downtrend was resumed with many successive Lower Lows until the COVID market bottom.

Right now, the pair is on a similar situation with the current 1W candle making a wick below the 1W MA-200. If it recovers before the week closes (of course much will depend upon the Nonfarm Payrolls report which will be released on Friday), then we might have a similar situation as mid August 2018, i.e. a dead cat bounce towards the Resistance which is currently at 1.1910. This thesis holds unless the price breaks (and closes a week) above the 1W MA50, which invalidates the downtrend.

 

In the very short-term our technical analysis are recommending to go Long on the currency pair at or below 1.15693, setting a Stop Loss at 1.14, and Short it at or above 1.18817, setting a Stop Loss at 1.196779.

As of 6:54 PM (GMT+1), the EURUSD was trading at 1.15631.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, October, 8: exchange rate 1.1482 Dollars, maximum 1.1654, minimum 1.1310. EUR to USD forecast on Monday, October, 11: exchange rate 1.1459 Dollars, maximum 1.1631, minimum 1.1287. Euro to Dollar forecast on Tuesday, October, 12: exchange rate 1.1488 Dollars, maximum 1.1660, minimum 1.1316. EUR to USD forecast on Wednesday, October, 13: exchange rate 1.1499 Dollars, maximum 1.1671, minimum 1.1327.

 

In 1 week, Euro to Dollar forecast on Thursday, October, 14: exchange rate 1.1484 Dollars, maximum 1.1656, minimum 1.1312. EUR to USD forecast on Friday, October, 15: exchange rate 1.1390 Dollars, maximum 1.1561, minimum 1.1219. Euro to Dollar forecast on Monday, October, 18: exchange rate 1.1390 Dollars, maximum 1.1561, minimum 1.1219. EUR to USD forecast on Tuesday, October, 19: exchange rate 1.1390 Dollars, maximum 1.1561, minimum 1.1219. Euro to Dollar forecast on Wednesday, October, 20: exchange rate 1.1343 Dollars, maximum 1.1513, minimum 1.1173.

 

 

 

 

 

 

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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