Forex Forecast: 14 – 18 February 2022

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Long on the currency pair at or below 1.1397, setting a Stop Loss at 1.10, and to short it at or above 1.1404, setting a Stop Loss at 1.16.

This week, EURUSD price range was 1.1473 high, and 1.1375 set today, Thursday. So, Monday, we could have Short the currency pair at 1.1467, buying it back on an intraday trading at 1.1417, for 0.44% profit. Tuesday, we could have Short it at 1.1448, buying it back on an intraday trading at 1.14, for 0.42% profit. Wednesday, we could have Short it at 1.1447, covering it on an intraday trading at 1.1404, for 0.38% profit.  Today, Thursday, we could have Short it at 1.1473, covering it on an intraday trading at 1.14, for an extra 0.62% ROI.

  Fundamental Overview

The EURUSD pair held ground through the first half of the day, trading in the 1.1420/40 region as market players remained side-lined ahead of the release of US inflation figures. Meanwhile, demand for the American currency remained subdued amid stable US government bond yields and mute equities. European indexes seesawed around their opening levels, ignoring some headlines coming from the EU.

The European Commission raised its inflation expectations for this year to 3.5% but is still expecting it to decline in 2023, seeing it at 1.7%. Prices pressure was blamed on supply disruption and the energy crisis, exacerbated by geopolitical tensions between Russia and Ukraine. Also, Bundesbank Governor Joachim Nagel indicated that the European Central Bank might raise rates later this year.

The US Consumer Price Index soared to 7.5% YoY in January, higher than the 7.3% expected. The core reading printed at 6%, also above the market’s forecast. The country also published Initial Jobless Claims for the week ended February 4, which decreased to 223K beating expectations. The dollar surged as an immediate reaction to headline inflation, resulting in EUR/USD piercing the 1.1400 threshold.

Technical Analysis

EURUSD came under heavy bearish pressure and fell below 1.1380 in the early American session on Thursday after the data from the US showed that the Consumer Price Index jumped to 7.5% YoY. Dollar’s strength was short-lived now trading at a fresh 2022 high and approaching the 1.1500 level.

 

The EURUSD pair was just trading near a daily low at 1.1384. The daily chart shows that the pair has fallen below a mildly bearish 100 SMA, although it has been seesawing around it since last week. Technical indicators extended their declines but remain within positive levels, hinting at further slides without confirming them. Even though, the USD  rebound on the US data Consumer Price Index, which jumped to 7.5% YoY, Dollar’s strength was short-lived, as the EUR strengthens to approach 1.1500 level.

In the near term, and according to the 4-hour chart, the risk is skewed to the downside. The pair is trading above its 20 SMA and the 100 and 200 SMAs. Technical indicators turned bullish at around 1.14862 price level.

Support levels are at 1.1340, 1.1305, and 1.1260

Resistance levels are at 1.1440, 1.1485, and 1.1520

For next week, as illustrated in the following chart, our technical analysis is suggesting to go Long on the currency pair at or below around 1.1555, setting a Stop loss at 1.1452, and Short it at or above 1.1675, setting a Stop loss at 1.17.

 

As of 4:56 PM (GMT), the EURUSD was trading at 1.14907.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, February, 11: exchange rate 1.1440 Dollars, maximum 1.1612, minimum 1.1268. EUR to USD forecast on Monday, February, 14: exchange rate 1.1418 Dollars, maximum 1.1589, minimum 1.1247. Euro to Dollar forecast on Tuesday, February, 15: exchange rate 1.1405 Dollars, maximum 1.1576, minimum 1.1234. EUR to USD forecast on Wednesday, February, 16: exchange rate 1.1416 Dollars, maximum 1.1587, minimum 1.1245.

 

In 1 week, Euro to Dollar forecast on Thursday, February, 17: exchange rate 1.1555 Dollars, maximum 1.1728, minimum 1.1382. EUR to USD forecast on Friday, February, 18: exchange rate 1.1590 Dollars, maximum 1.1764, minimum 1.1416. Euro to Dollar forecast on Monday, February, 21: exchange rate 1.1634 Dollars, maximum 1.1809, minimum 1.1459. EUR to USD forecast on Tuesday, February, 22: exchange rate 1.1716 Dollars, maximum 1.1892, minimum 1.1540. Euro to Dollar forecast on Wednesday, February, 23: exchange rate 1.1720 Dollars, maximum 1.1896, minimum 1.1544.

 

 

 

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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