Last week, our technical indicators suggested going Long at or below 1.09, setting a Stop Loss at 1.0684, and going Short at or above 1.09230, setting a Stop Loss at 1.11852.

This week, EURUSD price range was 1.1025 high set today, Thursday, and 1.0831 low set this past Monday. So, Monday, we could have bought the currency pair at 1.0833, selling it on an intraday trading at 1.0916, for 0.77% profit. Tuesday, we could have bought the currency pair at 1.0859, selling it on an intraday trading at 1.0926, for 0.62% profit.  Wednesday, we could have short the currency pair at 1.0999, covering it on an intraday trading at 1.0913, for 0.78% profit.  Thursday, we could have short it at 1.1023, covering it on an intraday trading at 1.0979, for an extra 0.4% ROI.

Fundamental Overview

The USD Index, which tracks the Greenback against a basket of currencies, languishes near the monthly low amid expectations that the Federal Reserve (Fed) will be done with its monetary tightening after hiking one last time next month. The bets were reaffirmed by the softer-than-expected US consumer inflation figures released on Wednesday.

The US Bureau of Labor Statistics reported that the headline CPI rose by 0.1% in March as compared to the 0.4% recorded in the previous month and the 0.3% anticipated.

Furthermore, the yearly rate decelerated from 6% in February to 5.0% during the reported month, while core CPI, which excludes food and energy prices, matched consensus estimates. The data, meanwhile, fueled hopes that disinflation is progressing smoothly and may even accelerate, potentially opening the door for the Fed to cut rates during the second half of the year amid signs of slowing economic growth. Adding to this, the March FOMC meeting minutes showed that several policymakers considered pausing interest rate increases after the failure of two regional banks.

Moreover, San Francisco Fed President Mary Daly also raised the possibility of fewer hikes and said that policy was at a point where rates did not need to be raised at every meeting. This, in turn, led to a fresh leg down in the US Treasury bond yields, which, along with the overnight rally in the US equity markets, seem to undermine the safe-haven buck.

Policymakers, however,  were wary of a mild US recession this year in the wake of a banking crisis and as high-interest rates continue to hinder economic growth. The outlook adds to market worries about a deeper global economic downturn and keeps a lid on the optimism in the markets, lending some support to the Greenback and capping gains for the EUR/USD pair, for the time being.

Nevertheless, the aforementioned fundamental backdrop favours bullish traders and should continue to lend some support to the major. Apart from this, growing acceptance for additional rate hikes by the European Central Bank (ECB) suggests that the path of least resistance for the EUR/USD pair is to the upside and any meaningful pullback might still be seen as a buying opportunity. In the absence of any relevant market-moving macro releases from the Eurozone, traders will look to the US economic docket – featuring the Producer Price Index (PPI) and the usual Weekly Initial Jobless Claims data – for some impetus later during the early North American session.

Technical Analysis

EURUSD faces barricades around 1.1000 as US Dollar sell-off pauses.

EURUSD is facing resistance in extending its rally above the psychological level of 1.1000 in early Europe. The pair is struggling as the US Dollar has paused its sell-off, awaiting the US PPI data for further downside. Eurozone Industrial Output coming up next.

From a technical perspective, any subsequent move up might confront some resistance near the 1.1030-1.1035 region, or the YTD peak touched in February. Some follow-through buying will be seen as a fresh trigger for bullish traders and pave the way for a further near-term appreciating move. With oscillators on the daily chart holding in the positive territory and still far from being in the overbought zone, the EURUSD pair might then aim to reclaim the 1.1100 mark. The momentum could get extended further towards the next relevant hurdle near the 1.1170 horizontal zone.

On the flip side, immediate support is pegged near the 1.0960-1.0950 region and any further decline is more likely to get bought into near the 1.0900 round figure. This should help limit the downside near the 1.0850-1.0830 area, which should now act as a strong base for the EURUSD pair. That said, a convincing break below might prompt some technical selling and accelerate the corrective slide towards the 1.0800 mark en route to the 50-day Simple Moving Average (SMA) support near the 1.0735 zone and the 100-day SMA, currently around the 1.0700 round figure mark.

 For next week, EURUSD is forming an ascending triangle. Our attention falls on the resistance 1.09267, which forms the upper boundary of the ascending triangle. Hence, it is expected the currency pair to form consolidation and numerous retests to the resistance level. It is very likely that under the pressure of the buyers this line will be broken, and in this case the growth will continue, and we will be interested in the next resistance at 1.10500. The moving averages are acting as support and giving the price a push.

Strong support: 1.0830.
Strong resistance: 1.09267 (break-down strategy) and 1.10500.

I expect that in the nearest future the price will break the resistance and will continue its growth. Short-term target is 1.10500 and medium term target is 1.11500.

Hence, our technical analysis are suggesting going Long at or below 1.09267, setting a Stop Loss at 1.0830, and going Short at or above 1.09990, setting a Stop Loss at 1.11.

As of 10:05 AM (GMT+1), the EURUSD was trading at 1.10125.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, April, 14: exchange rate 1.107 US Dollars, maximum 1.124, minimum 1.090. EUR to USD forecast on Monday, April, 17: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095. Euro to US Dollar forecast on Tuesday, April, 18: exchange rate 1.108 US Dollars, maximum 1.125, minimum 1.091. EUR to USD forecast on Wednesday, April, 19: exchange rate 1.107 US Dollars, maximum 1.124, minimum 1.090.

In 1 week, Euro to US Dollar forecast on Thursday, April, 20: exchange rate 1.108 US Dollars, maximum 1.125, minimum 1.091. EUR to USD forecast on Friday, April, 21: exchange rate 1.103 US Dollars, maximum 1.120, minimum 1.086. Euro to US Dollar forecast on Monday, April, 24: exchange rate 1.108 US Dollars, maximum 1.125, minimum 1.091. EUR to USD forecast on Tuesday, April, 25: exchange rate 1.114 US Dollars, maximum 1.131, minimum 1.097. Euro to US Dollar forecast on Wednesday, April, 26: exchange rate 1.108 US Dollars, maximum 1.125, minimum 1.091.


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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