Last week, our technical indicators suggested going Short at or above 1.05613, setting a Stop Loss at 1.06, and going Long at or below 1.06246, setting a Stop Loss at 1.05.

This week, EURUSD price range was 1.0695 high set this past Monday, and 1.0525 low set yesterday, Wednesday. So, Monday, we could have bought the currency pair at 1.0624, selling it on an intraday trading at 1.0693, for 0.65% profit. Tuesday, we could have short it at 1.06, covering it on an intraday trading at 1.0548, for 0.49% profit, and we could have bought it at 1.0548, selling it on an intraday trading at 1.0697, for 1.41% profit. Wednesday, we could have bought it at 1.0527, selling it on an intraday trading at 1.0576, for 0.47% profit, and we could have short it at 1.06, covering it on an intraday trading at 1.0527, for 0.69% profit. Today, we could have bought it at 1.0540, selling it on an intraday trading at 1.0583, for 0.41 profit, and we could have short it at 1.05613, covering it on an intraday trading at 1.0540, for an extra 0.2% ROI.

Fundamental Overview

EURUSD remains near monthly lows after the recovery faded near 1.0570 during the American session. The US Dollar failed to make a new leg higher but held onto recent gains. The Greenback looks firm as markets priced in “larger for longer” US interest rates. Data released on Wednesday helped consolidate expectations. Market participants also see a more hawkish European Central Bank (ECB) as recent surveys point to a higher terminal rate.

Price action is being driven by a stronger US Dollar, keeping EURUSD sellers in control. The DXY held at monthly highs, validating Tuesday’s rally triggered by FOMC Fed Chair Jerome Powell’s testimony before the US Congress. His comments boosted the odds of a larger rate hike from the Fed at the March meeting. On Wednesday, Powell testified again, offering no new information.

Regarding economic data, German Industrial Production rose more than expected in January, but Retail Sales unexpectedly fell. In the US, Automatic Data Processing (ADP) reported that private sector employment increased by 242K in February, surpassing expectations of 200K. In addition, the US Bureau of Labor Statistics (BLS) revealed on Wednesday that the number of job openings in January was 10.8 million, slightly higher than the market expectation of 10.6 million. The numbers show a tight labor market, helping the US Dollar and reaffirming Fed’s hawkish tone.

The economic docket on Thursday features no tier-one Eurozone reports and US Initial Jobless Claims. Markets will continue to digest Powell’s message while preparing for Nonfarm payrolls. The official jobs report due on Friday, together with next week’s US Consumer Price Index, could be critical ahead of the March Mar 21-22 FOMC meeting.

Technical Analysis

EURUSD continues to trade in positive territory above 1.0550 on Thursday. The US Dollar stays on the back foot amid retreating US Treasury bond yields and helps the pair erase some of the losses it suffered after FOMC Chairman Jerome Powell’s hawkish surprise.

After falling sharply on Tuesday, EURUSD is moving sideways. The pair hit a fresh monthly low at 1.0525 and then bounced to the upside. However, the recovery was limited, showing that the bearish pressure persists. A firm break below 1.0525/30 would expose the 100-day Simple Moving Average at 1.0505 and the 1.0500 area; below that emerges the 2023 low at 1.0480.

The 4-hour chart shows risks tilted to the downside for EURUSD, with the RSI near oversold levels and Momentum below its midline. A firm recovery above 1.0570 would alleviate the negative impulse, but only above 1.0620 the Euro would gain extra support.

For next week, Fed yesterday made some hawkish comments “rates are likely to be higher than previously anticipated”. However, before the next FOMC, we have a couple of events to consider, NFP and next week CPI data.

If NFP numbers come above expectations that will signal more rate hikes from the fed, and thus more USD strength and EURUSD downside, otherwise, it will not be enough for the Fed to hike rates. For CPI, numbers above expectations will lead to a more restrictive monetary policy and normal number will slow down the pace.
Hence, our technical analysis are suggesting going Long at or below 1.06, setting a Stop Loss at 1.05, and going Short at or above 1.065, setting a Stop Loss at 1.07338.

As of 12:49 PM (GMT), the EURUSD was trading at 1.05554.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, March, 10: exchange rate 1.054 US Dollars, maximum 1.070, minimum 1.038. EUR to USD forecast on Monday, March, 13: exchange rate 1.041 US Dollars, maximum 1.057, minimum 1.025. Euro to US Dollar forecast on Tuesday, March, 14: exchange rate 1.046 US Dollars, maximum 1.062, minimum 1.030. EUR to USD forecast on Wednesday, March, 15: exchange rate 1.049 US Dollars, maximum 1.065, minimum 1.033.

In 1 week, Euro to US Dollar forecast on Thursday, March, 16: exchange rate 1.042 US Dollars, maximum 1.058, minimum 1.026. EUR to USD forecast on Friday, March, 17: exchange rate 1.051 US Dollars, maximum 1.067, minimum 1.035. Euro to US Dollar forecast on Monday, March, 20: exchange rate 1.048 US Dollars, maximum 1.064, minimum 1.032. EUR to USD forecast on Tuesday, March, 21: exchange rate 1.054 US Dollars, maximum 1.070, minimum 1.038. Euro to US Dollar forecast on Wednesday, March, 22: exchange rate 1.049 US Dollars, maximum 1.065, minimum 1.033.

 

Until next article, wishing all of you wealthy trading!

 

 

 

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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