Last week, our technical indicators suggested going Long at or below 1.0499, setting a Stop Loss at 1.0355, and going Short at or above 1.0500, setting a Stop Loss at 1.06.

This week, EURUSD price range was 1.0640 high, set today, Thursday, and 1.0519 low, set this past Monday. So, Monday, we could have short the currency pair at 1.0574, covering it on an intraday trading at 1.0520, for 0.51% profit. Tuesday, we could have short it at 1.06, covering it on an intraday trading at 1.0555, for 0.42% profit. Wednesday, we could have short it at 1.06, covering it on an intraday trading at 1.0581, for an extra 0.18% ROI.

 Fundamental Overview

EURUSD continued to stretch higher toward 1.0650 early Thursday after posting small daily gains on Wednesday. The near-term technical outlook suggests that the pair is close to turning overbought but investors could ignore this condition in case US inflation data come in softer than forecast.

Risk flows continued to dominate the financial markets mid-week and the US Dollar found it difficult to hold its ground. Additionally, dovish comments from Federal Reserve (Fed) officials triggered another leg lower in US Treasury bond yields and further weighed on the currency.

Early Thursday, US stock index futures trade in positive territory, pointing to an upbeat market mood.

In the second half of the day, September Consumer Price Index (CPI) data from the US will be watched closely by market participants. Investors expect the CPI and the Core CPI, which excludes volatile food and energy prices, to rise 0.3% on a monthly basis.

According to the CME Group FedWatch Tool, markets are pricing in a 72% probability that the Fed will leave the policy rate unchanged this year. In case the monthly Core CPI comes in weaker than expected, dovish Fed bets could continue to drive the market action. In that scenario, US stocks could extend the weekly rally and the USD could further weaken. On the other hand, the USD could stage a correction on a strong Core CPI reading of 0.5% or above and cause EUR/USD to erase a large portion of its weekly gains.

Technical Analysis

EURUSD steadies above 1.0600, awaits US CPI. The currency pair is trading above 1.0600, holding steady in the European session on Thursday. Dovish Fed expectations keep the US Dollar bulls on the defensive and cap the downside in the pair. Traders seem reluctant to place aggressive bets ahead of the US inflation report.

The Relative Strength Index (RSI) indicator on the four-hour chart climbed to 70 early Thursday. In case the pair makes a technical correction, 1.0600 (psychological level, static level, ascending trend line) aligns as first support before the 1.0570-1.0580 area (Fibonacci 23.6% retracement, 20-period Simple Moving Average, 100-period SMA). A 4-hour close below the latter could discourage buyers and open the door for further losses toward 1.0540 (50-period SMA).

On the upside, immediate resistance is located at 1.0640 (Fibonacci 38.2% retracement of the latest downtrend) before 1.0670, where the 200-period Simple Moving Average (SMA) is located, and 1.0700 (Fibonacci 50% retracement, psychological level).

For next week, EURUSD is currently trading close to its resistance level, and we believe price may resume its price downtrend from this level at 1.06182, down to 1.0520 support line of the rising channel.

Hence, our technical analysis are suggesting going Long at or below 1.05610, setting a Stop Loss at 1.0490, and going Short at or above 1.06182, setting a Stop Loss at 1.07.

As of 11:48 AM (GMT+1), the EURUSD was trading at 1.06207.

EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, October, 13: exchange rate 1.064 US Dollars, maximum 1.080, minimum 1.048. EUR to USD forecast on Monday, October, 16: exchange rate 1.068 US Dollars, maximum 1.084, minimum 1.052. Euro to US Dollar forecast on Tuesday, October, 17: exchange rate 1.066 US Dollars, maximum 1.082, minimum 1.050. EUR to USD forecast on Wednesday, October, 18: exchange rate 1.070 US Dollars, maximum 1.086, minimum 1.054.

In 1 week, Euro to US Dollar forecast on Thursday, October, 19: exchange rate 1.074 US Dollars, maximum 1.090, minimum 1.058. EUR to USD forecast on Friday, October, 20: exchange rate 1.078 US Dollars, maximum 1.094, minimum 1.062. Euro to US Dollar forecast on Monday, October, 23: exchange rate 1.077 US Dollars, maximum 1.093, minimum 1.061. EUR to USD forecast on Tuesday, October, 24: exchange rate 1.067 US Dollars, maximum 1.083, minimum 1.051. Euro to US Dollar forecast on Wednesday, October, 25: exchange rate 1.068 US Dollars, maximum 1.084, minimum 1.052.

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.

 

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