Forex Forecast: 17 – 21 May 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Long on the EURUSD at or below 1.2020, setting a stop loss at 1.1993, and Short it at or above 1.2091, setting a stop loss at 1.21.
This week, EURUSD price range was 1.2182 high, set this past Tuesday, and 1.2051 low, set today, Thursday. Hence, we could have Short the currency pair this past Monday at 1.2176, buying it back on an intraday trading at 1.2129, for 0.39% profit. Tuesday, we could have short it at 1.2180, covering it on an intraday trading at 1.2124, for 0.46% profit. Wednesday, we could have short it at 1.2151, covering it on an intraday trading at 1.2067, for 0.69% and today, Thursday, we could have short it at 1.2105, covering it on an intraday trading at 1.2053, for an extra 0.43% profit.
Fundamental Overview
The EURUSD pair fell to a fresh weekly low of 1.2051 as demand for the greenback persists on the heels of mounting US inflationary pressures. The greenback rose alongside government bond yields, as the yield on the 10-year US Treasury note reached the critical 1.7% threshold.
Meanwhile, global equities trade in the red, reflecting fears of tighter monetary policies.
Data wise, the EU macroeconomic calendar had nothing to offer. As for the US, the country has just published the April Producer Price Index, which surged by more than anticipated, printing at 6.2% YoY. More relevant, Initial Jobless Claims for the week ended May 7 came in at 473K vs the 490K expected. The good news provide mild-support to equities, while the dollar shed a few points.
Technical Analysis
EURUSD remains sub-1.2100 after upbeat US data.
US Producer Prices rose by more than anticipated, while unemployment claims shrank by more than anticipated. EURUSD keeps trading below 1.2100 as investors eye firmer government bond yields.
The EURUSD pair trades near the mentioned weekly low, unable to recover the 1.2100 threshold. The above 4-hour chart shows that it is seesawing around a flat 100 SMA, while the 20 SMA gains bearish traction above the current level.
Meanwhile, technical indicators remain within negative levels, lacking clear directional strength. Overall, the risk is skewed to the downside, with a test of the 1.2000 mark on the cards for today.
Support levels are set at 1.2050, 1.2000, and 1.1960, while Resistance levels are at 1.2110, 1.2150, and 1.2190.
For next week, our technical indicators are suggesting to go Long on the EURUSD at or below 1.20711, setting a stop loss at 1.20, and Short it at or above 1.2165, setting a stop loss at 1.22.
As of 5:30 PM (GMT+1), the EURUSD was trading at 1.20837.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, May, 14: exchange rate 1.2006 Dollars, maximum 1.2186, minimum 1.1826. EUR to USD forecast on Monday, May, 17: exchange rate 1.2023 Dollars, maximum 1.2203, minimum 1.1843. Euro to Dollar forecast on Tuesday, May, 18: exchange rate 1.1992 Dollars, maximum 1.2172, minimum 1.1812. EUR to USD forecast on Wednesday, May, 19: exchange rate 1.2092 Dollars, maximum 1.2273, minimum 1.1911.
In 1 week, Euro to Dollar forecast on Thursday, May, 20: exchange rate 1.2150 Dollars, maximum 1.2332, minimum 1.1968. EUR to USD forecast on Friday, May, 21: exchange rate 1.2143 Dollars, maximum 1.2325, minimum 1.1961. Euro to Dollar forecast on Monday, May, 24: exchange rate 1.2086 Dollars, maximum 1.2267, minimum 1.1905. EUR to USD forecast on Tuesday, May, 25: exchange rate 1.2137 Dollars, maximum 1.2319, minimum 1.1955. Euro to Dollar forecast on Wednesday, May, 26: exchange rate 1.2033 Dollars, maximum 1.2213, minimum 1.1853.
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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