Forex Forecast: 13 – 17 September 2021

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to Short the currency pair at or above 1.1831, setting a Stop loss at 1.19, and go Long at or below $1.17821, setting a Stop loss at 1.17.

This week, EURUSD price range was 1.1888 high, set this past Monday, and 1.1802 low, set yesterday, Wednesday. Our first trading opportunity was on Tuesday to short the currency pair at 1.1883, covering it on an intraday trading at 1.1839, for 0.37% profit. Wednesday, we could have short it at 1.1850, covering it on an intraday trading at 1.1804, for 0.39% profit. Today, Thursday, we could have short it again at 1.1840, covering it on an intraday trading at 1.1806, for an extra 0.29% ROI.

Fundamental Overview

The EURUSD pair edged higher through the first half of the European session on Thursday and moved away from one-week lows, around the 1.1800 mark touched in the previous day. The uptick assisted the pair to snap three consecutive days of the losing streak and was sponsored by a modest US dollar pullback.

In fact, the yield on the benchmark 10-year US government bond extended its retracement slide from the highest level since mid-July, around 1.385% touched on Tuesday amid the global flight to safety. Worries that the fast-spreading Delta variant of the coronavirus could lead to a global economic slowdown took its toll on the risk sentiment. This was evident from a generally weaker tone around the equity markets, which forced investors to take refuge in traditional safe-haven assets and dragged the US bond yields lower.

That said, expectations about an imminent Fed taper announcement might continue to act as a tailwind for the greenback and keep a lid on any meaningful upside for the major, at least for now. Data released by the US Bureau of Labor Statistics on Wednesday showed that the number of job openings raced to a new record higher in July. The report also revealed a steady increase in the number of workers voluntarily quitting their jobs. This, in turn, suggested that a sharp slowdown in hiring last month was due to employers being unable to find workers rather than weak demand for labor. This, along with hawkish comments by several FOMC members, validated expectations that the Fed will begin rolling back its pandemic-era stimulus sooner rather than later.

Investors might also be reluctant to place aggressive directional bets ahead of the highly-anticipated European Central Bank (ECB) meeting. The recent spike in the Eurozone inflation to the highest level in over a decade prompted hawkish rhetoric from ECB policymakers. Hence, the market attention will mainly be on whether the ECB will move to reduce the pace of its bond purchases. The decision will be followed by the post-meeting press conference, where comments by ECB President Christine Lagarde should infuse some volatility around the euro cross.

Technical Analysis

 

The EURUSD nears 1.1800 after an unimpressive ECB, as the European Central Bank left its monetary policy unchanged as widely anticipated. Also, policymakers made it clear that there is no time for tapering, despite announcing they will be buying bonds at a “moderately lower pace.” Lagarde said they are “re-calibrating” not tapering.

From a technical perspective, the latest leg down from the post-NFP swing highs, levels beyond the 1.1900 mark, which has been along a downward sloping channel. Given the recent strong recovery from the 1.1665 region, or YTD lows, the mentioned channel could be categorized as a bullish continuation flag chart pattern.

With technical indicators on the daily chart holding in the positive territory, a sustained break through the channel resistance will set the stage for the resumption of a near three-week-old uptrend.

The pair might then aim to conquer the 1.1900 mark before climbing to the 1.1940 supply zone. The momentum could further get extended towards the 1.1975 region en-route the key 1.2000 psychological mark.

On the flip side, the overnight swing lows, around the 1.1800 mark now seems to protect the immediate downside ahead of the descending channel support near the 1.1785 region. Failure to defend the mentioned levels will negate the constructive set-up and prompt some technical selling.

The next relevant support is pegged near the 1.1755-50 region, below which the pair could slide back to the 1.1700 mark. The downward trajectory could eventually drag the pair back towards challenging YTD lows, around the 1.1665 region touched on August 20.

For next week, In my humble opinion price can retest the 1.18 price level and pull back. If EUR will break resistance at 1.19, we will have good chance to buy. Next resistance is at 1.20 and can be our main target, in the very short-run. Hence, our technical indicators suggest to Short the currency pair, at or above 1.18, setting a Stop loss at 1.19, and go Long at or below $1.19, setting a Stop loss at 1.20.

 

As of 3:22 AM (GMT+1), the EURUSD was trading at 1.1824.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, September, 10: exchange rate 1.1764 Dollars, maximum 1.1940, minimum 1.1588. EUR to USD forecast on Monday, September, 13: exchange rate 1.1771 Dollars, maximum 1.1948, minimum 1.1594. Euro to Dollar forecast on Tuesday, September, 14: exchange rate 1.1764 Dollars, maximum 1.1940, minimum 1.1588. EUR to USD forecast on Wednesday, September, 15: exchange rate 1.1768 Dollars, maximum 1.1945, minimum 1.1591.

 

In 1 week, In 1 week Euro to Dollar forecast on Thursday, September, 16: exchange rate 1.1802 Dollars, maximum 1.1979, minimum 1.1625. EUR to USD forecast on Friday, September, 17: exchange rate 1.1833 Dollars, maximum 1.2010, minimum 1.1656. Euro to Dollar forecast on Monday, September, 20: exchange rate 1.1845 Dollars, maximum 1.2023, minimum 1.1667. EUR to USD forecast on Tuesday, September, 21: exchange rate 1.1842 Dollars, maximum 1.2020, minimum 1.1664. Euro to Dollar forecast on Wednesday, September, 22: exchange rate 1.1888 Dollars, maximum 1.2066, minimum 1.1710.

 

 

 

 

 

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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