Forex Forecast: 12 – 16/10/2020
How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement
EURUSD Rates Week in Review
Last week, our technical indicators suggested going shorth on the EURUSD between 1.18 and 1.1740, setting a stop loss at 1.18473. So far, this week the EURUSD ranged from 1.1809 to 1.1707. Hence, we could have shorted the currency pair this past Monday at 1.1798 on an intraday trading, covering it at 1.1707, profiting 0.77%. Tuesday, we could have short it at 1.1809 on an intraday trading, covering it at 1.1731. for an extra 0.66% ROI. Yesterday, we could have short it at 1.1783 on an intraday trading, covering it at 1.1724, for 0.5% ROI. Today, Thursday, we could have short again the currency pair at 1.1781, covering it at 1.1733, locking in an extra 0.41% profit.
The EURUSD pair is closing Thursday around 1.1750, virtually unchanged after oscillating between a low of 1.1732 and a high of 1.1781, unable to set a directional short-term bias as markets alternate cautious optimism and a slight recovery of the US dollar. Investors’ attention remains focused on the US stimulus aid package negotiations and the upcoming presidential elections.
On Thursday, the European Central Bank released the ECB Monetary Policy Meeting Accounts, which showed that rate cuts and adjustments to the TLTROs conditions remain a possibility. The Accounts also showed that the recent appreciation of the euro was noticed by the Governing Council. In fact, the higher exchange rate was behind the revision lower in the inflation outlook published in September. Earlier on the day, separated data showed that German Trade Balance shrunk to €15.7 billion during August, with Imports expanding 5.8% and Exports rising 2.4%.
On the other side of the Atlantic, data showed Initial Jobless Claims in the US declined by 9,000 last week to 840,000, although worse than the 820,000 expected. There is no first-tier data scheduled on Friday.
EURUSD retreats from highs as hopes for fiscal stimulus fade. The currency pair is struggling with 1.1750, off the highs. House Speaker Pelosi cast doubts that a fiscal stimulus deal can be reached with Republicans. Earlier, US jobless claims missed estimates with 840K.
The technical picture for the EURUSD looks neutral, although slightly tilted to the upside, according to the 4-hour chart following this week range bound price action.
The price consolidates above the 50- and 100-period SMA, which are close to complete a bullish cross at the 1.1740 area, while the 20-period SMA offers immediate resistance at 1.1765. A break here could improve the EURUSD outlook, with the next upside target at 1.1790 (200-period SMA) and 1.1807, weekly high, ahead of 1.1917, Sep 10 high.
Support levels are at 1.1740, 1.1725, and 1.1690, while Resistance levels are at 1.1765, 1.1810, and 1.1850.
For next week and as shown in the following EURUSD chart, our technical indicatrors continue to illustrate a negative regressive analysis trend line, predicting lower future EURUSD prices. Therefore, our technical indicators suggest the sane short range trade on the EURUSD between 1.18 and 1.1740, setting a stop loss at 1.18473.
As of 11:53 PM (GMT+1), the EURUSD was trading at 1.17632.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, October, 9: exchange rate 1.1736 Dollars, maximum 1.1912, minimum 1.1560. EUR to USD forecast on Monday, October, 12: exchange rate 1.1728 Dollars, maximum 1.1904, minimum 1.1552. Euro to Dollar forecast on Tuesday, October, 13: exchange rate 1.1724 Dollars, maximum 1.1900, minimum 1.1548. EUR to USD forecast on Wednesday, October, 14: exchange rate 1.1790 Dollars, maximum 1.1967, minimum 1.1613.
In 1 week, Euro to Dollar forecast on Thursday, October, 15: exchange rate 1.1765 Dollars, maximum 1.1941, minimum 1.1589. EUR to USD forecast on Friday, October, 16: exchange rate 1.1789 Dollars, maximum 1.1966, minimum 1.1612. Euro to Dollar forecast on Monday, October, 19: exchange rate 1.1771 Dollars, maximum 1.1948, minimum 1.1594. EUR to USD forecast on Tuesday, October, 20: exchange rate 1.1854 Dollars, maximum 1.2032, minimum 1.1676. Euro to Dollar forecast on Wednesday, October, 21: exchange rate 1.1893 Dollars, maximum 1.2071, minimum 1.1715.
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 nor KeySoft. 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 the future performance of the EUR/USD.