Forex Forecast: 18 – 22 December 2023 for MT4 MT5

 

Last week, our technical indicators suggested going suggesting going Long at or below 1.085, setting a Stop Loss at 1.07473, and going Short at or above 1.08819, setting a Stop Loss at 1.10166.

This week, EURUSD price range was 1.0932 high, set today, Thursday, and 1.0741 low set this past Monday. So, Monday, we could have bought the currency pair at 1.0743, selling it on an intraday trading at 1.0779, for 0.34% profit. Tuesday, we could have bought it at 1.076, selling it on an intraday trading at 1.0828, for 0.63% profit. Wednesday, we could have bought it at 1.0774, selling it on an intraday trading at 1.0897, for 1.14% profit. Also, Wednesday, we could have short it at 1.0819, covering it on an intraday trading at 1.0774, for 0.42% profit. Thursday, we could have short it at 1.0931, covering it on an intraday trading at 1.088, for an extra 0.47% ROI.

 Fundamental Overview

EURUSD preserved its bullish momentum and climbed above 1.0900 for the first time since December 1st early Thursday after posting large gains on Wednesday. As the market focus shifts to the European Central Bank’s (ECB) policy announcements, the pair has gone into a consolidation phase slightly below 1.0900.

The US Dollar (USD) came under heavy selling pressure as Federal Reserve (Fed) Chairman Jerome Powell adopted a surprisingly dovish tone in the post-meeting press conference.

The Fed left the policy rate unchanged at 5.25%-5.5% as expected and the revised Summary of Projections pointed to a total of 75 basis points rate reduction in 2024. Powell said that they were focused on “not making the mistake of keeping rates too high too long” and acknowledged that policymakers were talking about when it will be appropriate to start cutting interest rates. The benchmark 10-year US Treasury bond yield slumped below 4% for the first time in over 4 months in the Fed aftermath and the US Dollar Index lost nearly 1%.

The ECB is also forecast to hold key rates unchanged after the last policy meeting of the year. Revised macroeconomic projections and ECB President Christine Lagarde’s comments will be watched closely by market participants.

In case Lagarde reiterates that it’s still too early to talk about a policy pivot and reminds of inflation risks, while repeating the data-dependency, EURUSD could extend its rally. On the other hand, the pair could start erasing its recent gains if Lagarde signals that they might soon start talking about the appropriate timing of a rate cut.

 Technical Analysis

EURUSD clings to gains above 1.0900 ahead of ECB policy announcements.

The currency pair continues to trade in positive territory above 1.0900 on Thursday. The pair remains supported by broad US Dollar weakness and a positive market mood. The next direction in the major hinges on the ECB’s policy outlook.

The Relative Strength Index (RSI) indicator on the 4-hour chart edged slightly lower after climbing above 70, suggesting that the pair could stage a technical correction before the next leg higher. Nevertheless, investors are likely to ignore this technical reading when reacting to the ECB.

1.0900 (Fibonacci 23.6% retracement of the latest uptrend) aligns as a pivot level. Once EURUSD confirms that level as support, it could target 1.0960 (static level) and 1.1000 (static level, psychological level).

On the downside, first support is located at 1.0860 (100-period Simple Moving Average (SMA), static level) before 1.0830-1.0820 (200-day SMA, Fibonacci 38.2% retracement) and 1.0800 (psychological level, static level, 200-period SMA).

For next week, observing the following chart, we can a bounce back in pricing on the currency pair at 1.0910 resistance level, which coincided with the seller (resistance level). After this movement, the price started to rise in an upward channel, where it rose back, and at later stage, the Euro reached the resistance line of the channel.  After, breaking 1.091, it made a retest and continued to move down until to current resistance level, which coincided with the buyer zone (support level). After the Euro rebounded from this level, it rose to the resistance line, but it got  back to the 1.0760 level.

Hence, and for next week, our technical analysis are suggesting going Long at or below 1.091, setting a Stop Loss at 1.076, and going Short at or above 1.09101, setting a Stop Loss at 1.105.

 

As of 13:05 PM (GMT), the EURUSD was trading at 1.09175.

EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, December, 15: exchange rate 1.096 US Dollars, maximum 1.112, minimum 1.080. EUR to USD forecast on Monday, December, 18: exchange rate 1.099 US Dollars, maximum 1.115, minimum 1.083. Euro to US Dollar forecast on Tuesday, December, 19: exchange rate 1.099 US Dollars, maximum 1.115, minimum 1.083. EUR to USD forecast on Wednesday, December, 20: exchange rate 1.096 US Dollars, maximum 1.112, minimum 1.080.

In 1 week, Euro to US Dollar forecast on Thursday, December, 21: exchange rate 1.099 US Dollars, maximum 1.115, minimum 1.083. EUR to USD forecast on Friday, December, 22: exchange rate 1.096 US Dollars, maximum 1.112, minimum 1.080. Euro to US Dollar forecast on Monday, December, 25: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. EUR to USD forecast on Tuesday, December, 26: exchange rate 1.087 US Dollars, maximum 1.103, minimum 1.071. Euro to US Dollar forecast on Wednesday, December, 27: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070.

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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