EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the currency pair at or above 0.9849, setting a Stop loss at 1.01 and Buy it at or below 0.98, setting a Stop loss at 0.96.

This week, EURUSD price range was 0.9776 high, set this past Tuesday, and 0.9668 low, set yesterday, Wednesday. So, Monday, we could have bought the currency pair at 0.9684, selling it on an intraday trading at 0.9752, for 0.7% profit. Tuesday, we could have bought the currency pair at 0.9674, selling it on an intraday trading at 0.9774, for 1.03% profit. Wednesday, we could have bought the currency pair at 0.9670, selling it on an intraday trading at 0.9732, for 0.64% profit.  Thursday we could have bought the currency pair at 0.9687, selling it on an intraday trading at 0.9741, for an extra 0.56% ROI. 0.7% profit.

 Fundamental Overview

EURUSD has been having a difficult time making a decisive move in either direction as investors refrain from committing to large positions ahead of the September inflation report from the US.

On Wednesday, European Central Bank President Christine Lagarde acknowledged that they have started discussions on quantitative tightening. Meanwhile, “I have no indication that with steps up to 75 basis points we will not be able to achieve our price stability mandates 2% inflation over the medium term,” said ECB policymaker Klaas Knot. These remarks, however, failed to help the shared currency gather strength.

The US Bureau of Labor Statistics will release the Consumer Price Index (CPI) figures for September at 1230 GMT. Market participants will pay close attention to the monthly Core CPI reading, which excludes volatile food and energy prices and is not distorted by base effects.

The market expectation points to a 0.5% increase in monthly Core CPI in September. On Wednesday,  Neel Kashkari said that it will be a judgement call on whether they hike the policy rates by 50 or 75 basis points increments in upcoming meetings. Hence, it would probably take a significant upside surprise for markets to start considering a 100 bps Fed rate hike in November.

Nevertheless, a hot inflation report is likely to allow the greenback to stay resilient against its major rivals. According to the CME Group FedWatch Tool, there is now an 81% probability of a 75 bps rate hike in November.

On the other hand, a reading at or below 0.4% is likely to trigger a relief rally in US stocks and cause the dollar to weaken with the initial reaction.

 Technical Analysis

EUUSD has gathered bullish momentum and climbed toward mid-0.9700s during the European trading hours. The renewed dollar weakness seems to be helping the pair push higher as investors gear up for the September CPI inflation data from the US.

The near-term technical outlook doesn’t point to a directional bias with the Relative Strength Index (RSI) indicator on the four-hour chart continuing to move sideways slightly below 50.

Additionally, EURUSD continue to trade near the 20-period SMA, reflecting the pair’s indecisiveness.

0.9680 (static level, lower limit of the trading range) aligns as interim support ahead of 0.9650 (static level). With a four-hour close below the latter, EUR/USD could continue to push lower toward 0.9600.

On the upside, 0.9720 (Fibonacci 61.8% retracement of the latest uptrend) forms immediate resistance before 0.9760 (100-period SMA) and  0.9780 (Fibonacci 50% retracement).

 For next week, we are seeing the price struggling on this level (0.97-0.96), this means the dynamic support it’s under the vision of many traders and there is indecision about the direction. Despite the possible inversion of the trend (short-term), my forecast remains Bearish. The Alternative scenario will happen if the price goes over 0.9800 Hence, our Technical analysis are suggesting to go Short on the currency pair at or above 0.97183, setting a Stop loss at 0.98, and Buy it at or below 0.97, setting a Stop loss at 0.955.

As of 11:50 AM (GMT+1), the EURUSD was trading at 0.97195.

 EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, October, 14: exchange rate 0.9716 Dollars, maximum 0.9862, minimum 0.9570. EUR to USD forecast on Monday, October, 17: exchange rate 0.9716 Dollars, maximum 0.9862, minimum 0.9570. Euro to Dollar forecast on Tuesday, October, 18: exchange rate 0.9679 Dollars, maximum 0.9824, minimum 0.9534. EUR to USD forecast on Wednesday, October, 19: exchange rate 0.9629 Dollars, maximum 0.9773, minimum 0.9485.

In 1 week, Euro to Dollar forecast on Thursday, October, 20: exchange rate 0.9535 Dollars, maximum 0.9678, minimum 0.9392. EUR to USD forecast on Friday, October, 21: exchange rate 0.9446 Dollars, maximum 0.9588, minimum 0.9304. Euro to Dollar forecast on Monday, October, 24: exchange rate 0.9596 Dollars, maximum 0.9740, minimum 0.9452. EUR to USD forecast on Tuesday, October, 25: exchange rate 0.9622 Dollars, maximum 0.9766, minimum 0.9478. Euro to Dollar forecast on Wednesday, October, 26: exchange rate 0.9600 Dollars, maximum 0.9744, minimum 0.9456.

 

 

 

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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