Last week, our technical indicators suggested going Short at or above 1.08463, setting a Stop Loss at 1.09, and going Long below 1.08138, setting a Stop Loss at 1.068.

This week, EURUSD price range was 1.1159 high set today, Thursday, and 1.0943 low, set this past Monday. So, have we kept our trading discipline, this week and so far, there was no trading opportunities for Long or Short positions, as both Long and short trading intervals were above and below last week technical analysis prices forecast.

Fundamental Overview

EURUSD gathered bullish momentum and registered impressive gains on Wednesday. The pair extended its rally and touched its highest level since March 2022 above 1.1150 in the early European morning on Thursday. The pair has turned extremely overbought following the latest upsurge, suggesting that buyers could wait for a technical correction before betting on additional gains.

Soft inflation data from the US weighed heavily on the US Dollar (USD) on Wednesday and fuelled EURUSD’s impressive ascend. The Consumer Price Index (CPI) rose 3% on a yearly basis in June following May’s increase of 4% and the monthly CPI and Core CPI both edged higher only 0.2%. Investors see a slim chance of the US Federal Reserve raising the policy rate twice more this year after this data, making it difficult for the USD to find demand.

It’s worth mentioning that Minneapolis Fed President Neel Kashkari reiterated on Thursday that policy rates might need to go higher If inflation proves to be more entrenched than expected. On a similar note, Richmond Fed President Thomas Barkin noted he is comfortable with doing more policy tightening if incoming data does not confirm that inflation will return to the 2% target.

Although these comments failed to help the USD find a foothold, the currency could limit its losses in case Fed policymakers try to convince markets that two more rate hikes this year still is the most likely scenario despite the recent deceleration in inflation. The Fed’s blackout period will start on Saturday and Fed policymakers will have Thursday and Friday to steer market expectations if they intend to do so.

In the second half of the day, the Producer price Index (PPI) data for June will be featured in the US economic docket. On a monthly basis, the PPI is forecast to rise 0.2% following the 0.3% decline recorded in May. A negative reading is likely to force the USD to stay on the back foot. A stronger-than-expected print could help the currency stage a rebound, at least with the immediate reaction.

Technical Analysis

The EURUSD pair is trading on the front foot, teasing a fresh 2023 top near 1.1150 heading toward the European session amid a broad-based US dollar weakness. The pair reached its highest level since March 2022 after softer US CPI data smashed the Greennback.

The Relative Strength Index (RSI) indicator on the four-hour chart stays near 80 and EUR/USD trades nearly 100 pips above the upper-limit of the ascending regression channel coming from early June, confirming overbought conditions.

In case EURUSD confirms 1.1160 (static level from April 2022) as support, 1.1200 (psychological level, static level) and 1.1270 (static level from March 2022) could be set as next bullish targets.

If EURUSD stages a technical correction, supports are located at 1.1100 (psychological level, upper-limit of the ascending channel), 1.1050 (20-period Simple Moving Average (SMA), mid-point of the ascending channel) and 1.1000 (psychological level).

For next week, EURUSD was able to break its resistance zone and trend line, with the NFP data and the weakness of the DXY. Now we expect it to continue its rise to the specified level after the pullback to the broken zone.

Our technical analysis are suggesting going Short at or above 1.10361, setting a Stop Loss at 1.12, and going Long below 1.09349, setting a Stop Loss at 1.08687.

As of 10:20 AM (GMT+1), the EURUSD was trading at 1.11651.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, July, 14: exchange rate 1.126 US Dollars, maximum 1.143, minimum 1.109. EUR to USD forecast on Monday, July, 17: exchange rate 1.127 US Dollars, maximum 1.144, minimum 1.110. Euro to US Dollar forecast on Tuesday, July, 18: exchange rate 1.130 US Dollars, maximum 1.147, minimum 1.113. EUR to USD forecast on Wednesday, July, 19: exchange rate 1.138 US Dollars, maximum 1.155, minimum 1.121.

 

In 1 week, Euro to US Dollar forecast on Thursday, July, 20: exchange rate 1.141 US Dollars, maximum 1.158, minimum 1.124. EUR to USD forecast on Friday, July, 21: exchange rate 1.139 US Dollars, maximum 1.156, minimum 1.122. Euro to US Dollar forecast on Monday, July, 24: exchange rate 1.135 US Dollars, maximum 1.152, minimum 1.118. EUR to USD forecast on Tuesday, July, 25: exchange rate 1.136 US Dollars, maximum 1.153, minimum 1.119. Euro to US Dollar forecast on Wednesday, July, 26: exchange rate 1.141 US Dollars, maximum 1.158, minimum 1.124.

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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