Last week, our technical indicators suggested going Long at or below 1.07817 setting a Stop Loss at 1.06, and going Short at or above 1.08, setting a Stop Loss at 1.09.
This week, the EURUSD price range was 1.0853 high, set today, Thursday, and 1.0802 low, set this past Monday. So, on Monday, we could have short the currency pair at 1.0845, covering it on an intraday trading at 1.0803, for 0.39% profit. Tuesday, we could have short it at 1.0833, covering it on an intraday trading at 1.0806, for 0.25% profit. Wednesday, we could have short it at 1.0831, covering it on an intraday trading at 1.0812, for 0.18% profit. Thursday, we could have short it at 1.0852, covering it on an intraday trading at 1.0833, for an extra 0.18% ROI.
Fundamental Overview
Following a quiet European session on Wednesday, the improving risk mood in the American trading hours made it difficult for the US Dollar (USD) to find demand and allowed EURUSD to end the day in positive territory. The USD stays on the back foot early Thursday, helping the pair continue to stretch higher.
The US Bureau of Labor Statistics (BLS) will release the Consumer Price Index (CPI) data for June later in the day. Investors expect the monthly core CPI, which excludes volatile food and energy prices, to rise 0.2% to match May’s increase.
The CME FedWatch Tool shows that markets see a nearly 30% chance of the Federal Reserve (Fed) leaving the policy rate unchanged in September. A monthly core CPI reading of 0.1% or lower could feed into expectations for a September rate cut and cause the USD to weaken against its rivals. On the other hand, a positive surprise in this data could support the currency and cap EURUSD’s upside.
The US economic docket will also feature the weekly Initial Jobless Claims data. In case CPI figures come in line with analysts’ estimate, this data could drive the USD’s valuation. If the number of first-time applications for unemployment benefits rise close to 250,000, the USD could come under renewed selling pressure, while a reading at or below 220,000 could have the opposite effect.
Technical Analysis
The EURUSD advances toward 1.0850, US CPI eyed.
The currency pair is on a gradual ascent toward 1.0850 in the European session on Thursday. The pair’s further upside, however, could be capped, as traders refrain from placing fresh bets ahead of the critical US consumer inflation figures.
The Relative Strength Index (RSI) indicator on the 4-hour chart rose slightly above 70. Although this development points to overbought conditions for EUR/USD in the near term, investors could ignore it when reacting to the US inflation data.
On the upside, 1.0900 (psychological level, static level) could be seen as first resistance before 1.0915 (June 4 high). In case the pair fails to stabilize above 1.0840-1.0850 (Fibonacci 23.6% retracement of the latest uptrend, static level), buyers could get discouraged. In this scenario, the 100-day and the 200-day Simple Moving Averages (SMA) form strong support at 1.0800 before the 200-period SMA on the 4-hour chart at 1.0780.
For next week, the target level remains at 1.08750. Only a drop in price to the buying zone would make us re-enter the market with new Long orders, taking advantage of a better entry price.
Hence our technical analysis is suggesting going Long at or below 1.08 setting a Stop Loss at 1.07, and going Short above 1.08, setting a Stop Loss at 1.09.
As of 12:37 PM (GMT+1), the EURUSD was trading at 1.08500.
EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, July, 12: exchange rate 1.085 US Dollars, maximum 1.101, minimum 1.069. EUR to USD forecast on Monday, July, 15: exchange rate 1.084 US Dollars, maximum 1.100, minimum 1.068. Euro to US Dollar forecast on Tuesday, July, 16: exchange rate 1.083 US Dollars, maximum 1.099, minimum 1.067. EUR to USD forecast on Wednesday, July, 17: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070.
In 1 week, Euro to US Dollar forecast on Thursday, July, 18: exchange rate 1.088 US Dollars, maximum 1.104, minimum 1.072. EUR to USD forecast on Friday, July, 19: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. Euro to US Dollar forecast on Monday, July, 22: exchange rate 1.093 US Dollars, maximum 1.109, minimum 1.077. EUR to USD forecast on Tuesday, July, 23: exchange rate 1.096 US Dollars, maximum 1.112, minimum 1.080. Euro to US Dollar forecast on Wednesday, July, 24: exchange rate 1.097 US Dollars, maximum 1.113, minimum 1.081.
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.
