Forex Forecast: 14 – 18/09/2020
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 short at or above 1.18179. Throughout this week, the EURUSD traded in a range of 1.1849-1.1765. So, this past Monday, we could have shorted the currency pair at 1.1849, to cover it on Tuesday at 1.1765, gaining 0.71% ROI. Tuesday, we could have short it at 1.1829, buying it back on an intraday trading at 1.1765, and locking in an extra 0.54% ROI. Yesterday, we could have shorted it at 1.1834, closing the position on an intraday trading at 1.1753, making an extra 0.68% ROI. Today, Thursday, we could have shorted the EURUSD at 1.1912, closing the short position on an intraday trading at 1.18.01, gaining an extra 0.97% ROI.
The EURUSD pair is up this Thursday, trading around 1.1890 as ECB’s Lagarde speaks. Easing dollar’s demand alongside an on hold ECB is backing the shared currency this Thursday. Words from the ECB´s head are hawkish, as suspected after yesterday rumours.
Despite persistent uncertainty, Lagarde started her speech mentioning a strong rebound in macroeconomic activity, although noting that it’s still below pre-pandemic levels and adding that ample accommodative support is needed.
Among other things, Lagarde referred to the exchange rate, saying that policymakers will carefully assess developments, including it. Also, the Governing Council has reportedly agreed that there is no need to overreact to euro gains, boosting the pair.
Meanwhile, the US published Initial Jobless Claims for the week ended September 4, which came in at 884K, worse than anticipated. The country also published August PPI which beat expectations but remained in the red at -0.2% YoY.
EURUSD slips off 1.19 following EU-UK row, despite lax ECB approach. As of 6:03 (GMT+1), the EURUSD was trading at 1.1857, off the highs achieved after the ECB said it is not targeting the exchange rate. The euro is being dragged down by the intensifying Brexit crisis.
The EURUSD pair has trimmed 50% of its latest losses and is technically bullish in the short-term.
The 4-hour chart above shows that the price has broken above all of its moving averages, while technical indicators head firmly higher within positive levels.
The 61.8% retracement of its latest daily slump comes at 1.1910, the immediate resistance level. A break above this last would open doors to a retest of the year high at 1.2011.
Support levels are at 1.1850, 1.1810, 1.1760, and Resistance levels are at 1.1910, 1.1950, and 1.1990.
For next week and as shown in the following EURUSD 4-hour chart, our technical indicators suggest staying short until price remains below 50 SMA on an SMA set at 20/50/200. Hence a short position may be entered at or above 1.1844.
As of 6:22 PM (GMT+1), the EURUSD was trading at 1.1860.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, September, 11: exchange rate 1.1813 Dollars, maximum 1.1990, minimum 1.1636. EUR to USD forecast on Monday, September, 14: exchange rate 1.1792 Dollars, maximum 1.1969, minimum 1.1615. Euro to Dollar forecast on Tuesday, September, 15: exchange rate 1.1775 Dollars, maximum 1.1952, minimum 1.1598. EUR to USD forecast on Wednesday, September, 16: exchange rate 1.1776 Dollars, maximum 1.1953, minimum 1.1599.
In 1 week, Euro to Dollar forecast on Thursday, September, 17: exchange rate 1.1764 Dollars, maximum 1.1940, minimum 1.1588. EUR to USD forecast on Friday, September, 18: exchange rate 1.1680 Dollars, maximum 1.1855, minimum 1.1505. Euro to Dollar forecast on Monday, September, 21: exchange rate 1.1664 Dollars, maximum 1.1839, minimum 1.1489. EUR to USD forecast on Tuesday, September, 22: exchange rate 1.1714 Dollars, maximum 1.1890, minimum 1.1538. Euro to Dollar forecast on Wednesday, September, 23: exchange rate 1.1813 Dollars, maximum 1.1990, minimum 1.1636.
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.