EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the EURUSD at or above 1.04056, setting a Stop Loss at 1.05, and to go Long at or below 1.0361, setting a Stop Loss at 1.01714.

This week, EURUSD price range was 1.0596 high, set today this past Monday, and 1.0443 low, set yesterday, Wednesday. So, Monday, we could have short the currency pair at 1.05, covering it on an intraday trading at 1.0482, for 0.17% profit. Tuesday, we could have short the currency pair at 1.05, covering it on an intraday trading at 1.0461, for 0.37% profit. Wednesday, we could have short it at 1.05, covering it on an intraday trading at 1.0445, for 0.52% profit. Thursday, we could have short it at 1.05, covering it on an intraday trading at 1.0492, for an extra 0.08% ROI.

Fundamental Overview

EURUSD seems to have stabilized above 1.0500 early Thursday after having managed to close in the positive territory for the first time this week on Wednesday. The technical outlook suggests that buyers could retain control in the short term as long as the pair continues to trade above 1.0500.

The renewed US Dollar weakness amid falling US Treasury bond yields helped EURUSD edge higher in the second half of the day on Wednesday. Amid growing concerns over the US economy tipping into recession next year, the benchmark 10-year US Treasury bond yield dropped to its lowest level since mid-September at 3.4%.

During the European trading hours, the 10-year US T-bond yield is recovering toward 3.5% and helping the US Dollar limit its losses for the time being. Meanwhile, US stock index futures trade modestly higher on the day.

The US Department of Labor’s weekly Initial Jobless Claims data will be featured in the US economic docket but market participants are unlikely to react to this report. Hence, the risk perception could impact EURUSD’s action in the second half of the day. In case Wall Street’s main indexes start pushing higher after the opening bell, the US Dollar is likely to have a hard time finding demand and help EURUSD push higher. A negative shift in risk mood could have the opposite impact on the pair.

European Central Bank (ECB) President Christine Lagarde is scheduled to deliver her pre-recorded opening remarks at a virtual conference hosted by the European Systemic Risk Board at 1200 GMT. Since the ECB is in the quiet period ahead of next week’s policy meeting, Lagarde is likely to refrain from commenting on the policy outlook.

Technical Analysis

EURUSD stays bid above 1.0500 ahead of Lagarde speech. EURUSD is holding higher ground above 1.0500 in the early European trading hours, as the US Dollar rebound fizzles despite a cautious market mood and higher Treasury yields. Concerns over the recession and hawkish Fed outlook dent risk appetite. Lagarde’s speech eyed.

EURUSD climbed above 1.0500, where the Fibonacci 23.6% retracement of the latest uptrend and the 20-period Simple Moving Average (SMA) on the four-hour chart is located.

Additionally, the Relative Strength Index rose slightly above 50, pointing to a bullish tilt in the short-term outlook.

1.0540 (static level) aligns as interim resistance ahead of 1.0580 (end-point of the uptrend) and 1.0600 (psychological level).

On the downside, a four-hour close below 1.0500 could be seen as a bearish development and open the door for an extended slide toward the 1.0460/1.0450 area (50-period SMA, Fibonacci 38.2% retracement) and 1.0430 (Fibonacci 50% retracement, 100-period SMA).

For next week, despite all the negative reports from the economic news releases, the EURUSD  Bullish rally continues to show strong inputs to the market. After the currency pair price reached the 88.6% Fibonacci on the support 1.04500, making a strong bullish candle as a confirmation of the possible continuation of the bullish scenario. Price may continue to grow and our technical analysis are forecasting a Long setup.  Hence, for next week, our technical analysis are suggesting to go Long at or below 1.05081, setting a Stop Loss at 1.04, and to go Short at or above 1.05082, setting a Stop Loss at 1.065.

As of 12:32 PM (GMT), the EURUSD was trading at 1.05158.

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, December, 9: exchange rate 1.0554 Dollars, maximum 1.0712, minimum 1.0396. EUR to USD forecast on Monday, December, 12: exchange rate 1.0522 Dollars, maximum 1.0680, minimum 1.0364. Euro to Dollar forecast on Tuesday, December, 13: exchange rate 1.0491 Dollars, maximum 1.0648, minimum 1.0334. EUR to USD forecast on Wednesday, December, 14: exchange rate 1.0497 Dollars, maximum 1.0654, minimum 1.0340.


In 1 week, Euro to Dollar forecast on Thursday, December, 15: exchange rate 1.0606 Dollars, maximum 1.0765, minimum 1.0447. EUR to USD forecast on Friday, December, 16: exchange rate 1.0693 Dollars, maximum 1.0853, minimum 1.0533. Euro to Dollar forecast on Monday, December, 19: exchange rate 1.0682 Dollars, maximum 1.0842, minimum 1.0522. EUR to USD forecast on Tuesday, December, 20: exchange rate 1.0618 Dollars, maximum 1.0777, minimum 1.0459. Euro to Dollar forecast on Wednesday, December, 21: exchange rate 1.0611 Dollars, maximum 1.0770, minimum 1.0452.


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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