Forex Forecast: 18 – 22 January 2021

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to initiate a Long position at or below 1.22, setting a stop loss at 1.20. The EURUSD has been trading in a price range of 1.2227 high, set this past Monday, and 1.2112 on Thursday 14th. Hence, this past Monday, we could have initiated a Long position at 1.2135, selling it on an intraday trading at 1.2225, realizing 0.95% ROI. Tuesday, we could have bought it at 1.2138, selling it on an intraday trading at 1.2209, for 0.58% profit. Wednesday, we could have bought it at $1.2142, selling it on an intraday trading at 1.2222, realizing 0.66% ROI. Thursday, we could have bought it at 1.2110, selling it on a intraday trading at 1.2169, for an extra 0.49% trade profit.

 Fundamental Overview

US jobless claims figures badly disappointed with a rise to 965,000 compared with fewer than 800,000 projected, yet the news failed to halt the dollar’s advance.

Elsewhere, the European Central Bank’s meeting minutes showed that the Frankfurt-based institution preferred expanding its own debt purchasing scheme in December over cutting rates. The move supported the euro back then and echoing that stance had little effect on Thursday.

The German economy has likely contracted by around 5% in 2020 according to initial estimates and Italy’s government is suffering a political crisis. These developments only add to the euro’s suffering.

Overall, there are reasons to see further falls, yet Powell has the power to change the pair’s course.

 Technical Analysis

EURUSD has dropped below 1.2125, the lowest since mid-December. Media reports suggested President-elect Biden’s stimulus package will be around $2 trillion, more than expected. Ahead of his speech, Fed Chair Jerome Powell speaks. US jobless claims disappointed with 965,000.

Eurodollar has dropped below the 200 Simple Moving Average on the above four-hour chart and continues suffering from downside momentum.

The recent decline has yet to push the Relative Strength Index below 30, to oversold territory. All in all, bears are in control.

The next cushion is close,  as the round 1.21 level provided support in early December. Further down, 1.2060 was a swing low, and it is closely followed by 1.2045, a stepping stone on the way up.

Above 1.2125, the next level to watch is 1.2170, the daily high. It is followed by 1.2222, the weekly peak, and then by 1.2245.

For next week, as illustrated in the following 4-hour EURUSD chart, our technical analysis indicators appoint for a neutral trading. Meaning, the currency pair may either brake support at 1.2150, or resume an uptrend movement. Therefore and to be on the safe side, I would wait to buy the EURUSD between 1.20327 and 1.20214, and Short it between 1.23162 and 1.23.

As of 15:08 PM (GMT), the EURUSD was trading at 1.2195.

EUR to USD forecast for tomorrow:  Euro to Dollar forecast on Friday, January, 15: exchange rate 1.2110 Dollars, maximum 1.2292, minimum 1.1928. EUR to USD forecast on Monday, January, 18: exchange rate 1.2165 Dollars, maximum 1.2347, minimum 1.1983. Euro to Dollar forecast on Tuesday, January, 19: exchange rate 1.2093 Dollars, maximum 1.2274, minimum 1.1912. EUR to USD forecast on Wednesday, January, 20: exchange rate 1.2050 Dollars, maximum 1.2231, minimum 1.1869.

In 1 week, Euro to Dollar forecast on Thursday, January, 21: exchange rate 1.1992 Dollars, maximum 1.2172, minimum 1.1812. EUR to USD forecast on Friday, January, 22: exchange rate 1.2017 Dollars, maximum 1.2197, minimum 1.1837. Euro to Dollar forecast on Monday, January, 25: exchange rate 1.2066 Dollars, maximum 1.2247, minimum 1.1885. EUR to USD forecast on Tuesday, January, 26: exchange rate 1.2091 Dollars, maximum 1.2272, minimum 1.1910. Euro to Dollar forecast on Wednesday, January, 27: exchange rate 1.2091 Dollars, maximum 1.2272, minimum 1.1910.

 

 

 

 

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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