Forex Forecast: 18 – 22 April 2022

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Long on the currency pair at or below 1.09940, setting a stop loss at 1.09, and Short it at or above 1.10, setting a stop loss at 1.1142.

This week, EURUSD price range was 1.0951 high set this past Monday, and 1.0758 set today, Thursday. So, Monday, we could have bought it at 1.0874, selling it on an intraday trading at 1.0949, for 0.69% profit. Tuesday, we could have bought it at 1.0823, selling it on an intraday trading at 1.0903, for 0.74% profit. Wednesday, we could have bought it at 1.0811, selling it on an intraday trading at 1.0894, for 0.77% profit. Today, we could have bought it at 1.0760, selling it on an intraday trading at 1.0921, for an extra 1.5% ROI.

 Fundamental Overview

The EURUSD pair reached an intraday high of 1.0923, holding nearby ahead of the European Central Bank monetary policy decision. The central bank surprised with a dovish decision, as it maintained rates on hold, as anticipated, and also announced it would end its bond-buying APP program in the third quarter of the year. Monthly net purchases will amount to €40 billion in April, €30 billion in May and €20 billion in June.

Generally speaking, the statement was dovish as the document noted that Russia’s aggression is affecting the economies in Europe and beyond. Higher energy and commodity prices are affecting demand and slowing production, which result in higher inflation. Also, trade disruptions are leading to new shortages of materials and inputs, another factor weighing on prices pressure. The EUR/USD pair fell with the announcement towards the 1.0860 area.

Meanwhile, and as ECB President Christine Lagarde offers a speech, the US released March Retail Sales, which were up by 0.5% MoM, below the 0.6% expected. Also, Initial Jobless Claims for the week ended April 8 printed at 185K worse than anticipated. Finally, the country released March Import and Export Prices, beating the market’s expectations. Later in the session, the US will release the preliminary estimate of the April Consumer Sentiment Index.

Technical Analysis

EURUSD has extended its slide and dropped below 1.0800 for the first time in nearly two years. ECB left its policy settings unchanged and President Lagarde refrained from offering clarity on the timing of the first rate hike or the end of the QE, weighing heavily on the shared currency.

 

The EURUSD pair currently trades in the 1.0870 region, and the above daily chart shows that the risk remains skewed to the downside.

The pair keeps trading well below a bearish 20 SMA, which converges with a Fibonacci resistance level at 1.0965. Technical indicators, in the meantime, remain directionless within negative levels.

The 4-hour chart also shows that the pair is currently hovering around a flat 20 SMA, while the longer ones maintain their bearish slope well above the current level. At the same time, technical indicators turned lower, and are currently accelerating south below their midlines, hinting at further declines ahead.

Support levels are at 1.0850, 1.0800, and 1.0760.

Resistance levels are at 1.0930, 1.0965, and 1.1000

For next week, and as illustrated in the following EURUSD chart, according to our technical analysis, we would go Long on the currency pair at or below 1.0982, setting a stop loss at 1.07258, and Short it above 1.0946, setting a stop loss at 1.10597.

 

As of 4:39 PM (GMT), the EURUSD was trading at 1.07914.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, April, 15: exchange rate 1.0957 Dollars, maximum 1.1121, minimum 1.0793. EUR to USD forecast on Monday, April, 18: exchange rate 1.0899 Dollars, maximum 1.1062, minimum 1.0736. Euro to Dollar forecast on Tuesday, April, 19: exchange rate 1.0913 Dollars, maximum 1.1077, minimum 1.0749. EUR to USD forecast on Wednesday, April, 20: exchange rate 1.0903 Dollars, maximum 1.1067, minimum 1.0739.

 

In 1 week, Euro to Dollar forecast on Thursday, April, 21: exchange rate 1.0886 Dollars, maximum 1.1049, minimum 1.0723. EUR to USD forecast on Friday, April, 22: exchange rate 1.0879 Dollars, maximum 1.1042, minimum 1.0716. Euro to Dollar forecast on Monday, April, 25: exchange rate 1.0811 Dollars, maximum 1.0973, minimum 1.0649. EUR to USD forecast on Tuesday, April, 26: exchange rate 1.0742 Dollars, maximum 1.0903, minimum 1.0581. Euro to Dollar forecast on Wednesday, April, 27: exchange rate 1.0720 Dollars, maximum 1.0881, minimum 1.0559.

 

 

 

 

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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