Forex Forecast: 14 – 18 November 2022
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Short on the EURUSD at or above 0.97676, setting a Stop Loss at 0.98693, and to go Long at or below 0.97999, setting a Stop Loss at 0.95550.
This week, EURUSD price range was 1.00357 high, set this past Tuesday, and 0.9899 low, set this past Monday. Have we followed our past week technical analysis suggestions, keeping our trading discipline, so far, this week, there has not been any Long or Short intraday trading opportunities.
Fundamental Overview
EURUSD has lost its traction and declined below 1.0000 in the early European morning on Thursday. The near-term technical outlook points to a lack of buyers interest but the market reaction to the October Consumer Price Index (CPI) data from the United States could drive the pair’s action in the second half of the day.
The risk-averse market atmosphere helped the US Dollar (USD) gather strength on Wednesday and caused EURUSD to snap a three-day winning streak. With investors remaining cautious early Thursday, the pair is having a difficult time shaking off the bearish pressure. The US Dollar Index, which gained 0.75% on Wednesday, was last seen posting small daily gains at 110.55.
The annual CPI in the US is forecast to decline to 8% in October from 8.2% in September. The Core CPI, which excludes volatile food and energy prices, is expected to edge lower to 6.5% on a yearly basis from 6.6%.
The USD came under heavy selling pressure on Friday after the October jobs report revealed that annual Average Hourly Earnings declined to 4.7% from 5%. The fact that investors largely ignored the better-than-expected Nonfarm Payrolls growth and reacted to the wage inflation component suggests that a soft CPI print could trigger another risk rally and weigh heavily on the USD.
On the other hand, a hot inflation report with the Core CPI coming in above September’s 6.6% reading could cause investors to reconsider the possibility of one more 75 basis points Fed rate hike in December and provide a boost to the USD. In that case, EURUSD could extend its slide, at least with an immediate reaction.
Technical Analysis
EURUSD jumped to 1.0100 after US inflation data, gathering bullish momentum and gaining more than 100 pips with the immediate reaction to soft US inflation data. In October, Core CPI declined to 6.3% from 6.6%, falling short of the market expectation of 6.5%.
EURUSD was last seen trading slightly below 1.0000, where the Fibonacci 23.6% retracement of the latest uptrend is located. In case the pair confirms that level as resistance, it could decline toward 0.9950 (Fibonacci 38.2% retracement) and 0.9920 (100-period Simple Moving Average on the above four-hour chart, Fibonacci 50% retracement).
On the upside, EURUSD is likely to face interim resistance at 1.0020 before targeting 1.0080 (the end-point of the latest uptrend) and 1.0100 (psychological level, static level).
For next week, as illustrated in the following 3-hour chart, our technical analysis are suggesting to go Short on the EURUSD at or above 1.01985, setting a Stop Loss at 1.03, and to go Long at or below 1.00949, setting a Stop Loss at 0.985.
As of 14:41 PM (GMT), the EURUSD was trading at 1.01441.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, November, 11: exchange rate 0.9952 Dollars, maximum 1.0101, minimum 0.9803. EUR to USD forecast on Monday, November, 14: exchange rate 1.0010 Dollars, maximum 1.0160, minimum 0.9860. Euro to Dollar forecast on Tuesday, November, 15: exchange rate 1.0069 Dollars, maximum 1.0220, minimum 0.9918. EUR to USD forecast on Wednesday, November, 16: exchange rate 1.0284 Dollars, maximum 1.0438, minimum 1.0130.
In 1 week, Euro to Dollar forecast on Thursday, November, 17: exchange rate 1.0215 Dollars, maximum 1.0368, minimum 1.0062. EUR to USD forecast on Friday, November, 18: exchange rate 1.0152 Dollars, maximum 1.0304, minimum 1.0000. Euro to Dollar forecast on Monday, November, 21: exchange rate 1.0148 Dollars, maximum 1.0300, minimum 0.9996. EUR to USD forecast on Tuesday, November, 22: exchange rate 1.0065 Dollars, maximum 1.0216, minimum 0.9914. Euro to Dollar forecast on Wednesday, November, 23: exchange rate 1.0062 Dollars, maximum 1.0213, minimum 0.9911.
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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