Forex Forecast: 18 – 22 September 2023 for MT4 MT5
Last week, our technical indicators suggested going Short at or above 1.08, setting a Stop Loss at 1.09258, and going Long at or below 1.07693, setting a Stop Loss at 1.06496.
This week, EURUSD price range was 1.0766 high set yesterday, Wednesday, and 1.0654 low set today. So, Monday, we could have bought the currency pair at 1.0708, selling it on an intraday trading at 1.0759, for 0.48% profit. Tuesday, we could have bought it at 1.0706, selling it on an intraday trading at 1.0768, for 0.58% profit. Wednesday, we could have bought it at 1.0712, selling it on an intraday trading at 1.0765, for 0.49% profit. Thursday, we could have bought it at 1.0655, selling it on an intraday trading at 1.0752, for an extra 0.91% ROI.
Fundamental Overview
The EURUSD pair held inside a tight intraday range throughout the first half of Thursday, with the pair stable around 1.0730 ahead of the main event of the day, the European Central Bank (ECB) monetary policy decision.
After the release of the United States (US) Consumer Price Index (CPI), financial markets turned modestly optimistic on Wednesday. Inflation in the US was not as encouraging as the Federal Reserve (Fed) may have wanted, but it fell short of affecting monetary policy decisions enough to underpin the sentiment.
The ECB hiked rates by 25 basis points (bps), which was not much of a surprise as market players were somehow expecting such an announcement against analysts’ odds. The EURUSD pair fell below 1.0700 with the news, as despite the hawkish decision, the accompanying statement was dovish. “The governing council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return.”
Furthermore, the central bank upwardly revised inflation for this year from 5.4% to 5.6% and from 3% to 3.2% for 2024. Growth, on the other hand, it has been downwardly revised. ECB now expects the euro area economy to expand by 0.7% in 2023, 1.0% in 2024 and 1.5% in 2025.
The pair accelerated its slump following the release of US data, as Retail Sales rose 0.6% MoM in August, much better than the 0.2% anticipated. At the same time, the Producer Price Index (PPI) jumped to 0.7% MoM and 1.6% YoY in August, higher than expected. US Treasury yields advanced with the news, with the 2-year note offering 5.01% and boosting demand for the American dollar.
Technical Analysis
The EURUSD pair plummeted to 1.0654, its lowest since last May.
The daily chart for the pair shows that the bearish case is strong, as EURUSD slid further below its moving averages, with the 20 Simple Moving Average (SMA) accelerating south below the longer ones. At the same time, technical indicators gain downward momentum within negative levels, in line with lower lows.
In the 4-hour chart, technical indicators head south almost vertically, with the Relative Strength Index (RSI) indicator approaching oversold readings. A now bearish 20 SMA contained the upside while developing below the longer ones, all anticipating another leg south.
Support levels are at 1.0645, 1.0605, and 1.0560.
Resistance levels are at 1.0720, 1.0770, and 1.0810.
For next week, not long time ago the currency pair price declined to $1.0770 resistance level, which coincides with resistance area and support line of triangle illustrated in the following chart. After, the EURUSD rebounded, reaching the resistance line of triangle, breaking $1.0880 level. However, after the price bounced back, it made a strong downward move, breaking two important resistance levels of $1.0770 and $1.0880. We believe the Euro may decline a little more, before starting to rise to $1.0810 level, thereby breaking resistance level and exiting from flat price levels.
Hence, our technical analysis are suggesting going Long at or below 1.0760, setting a Stop Loss at 1.06, and going Short at or above 1.07780, setting a Stop Loss at 1.08791.
As of 17:02 PM (GMT+1), the EURUSD was trading at 1.06627.
EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, September, 15: exchange rate 1.070 US Dollars, maximum 1.086, minimum 1.054. EUR to USD forecast on Monday, September, 18: exchange rate 1.071 US Dollars, maximum 1.087, minimum 1.055. Euro to US Dollar forecast on Tuesday, September, 19: exchange rate 1.076 US Dollars, maximum 1.092, minimum 1.060. EUR to USD forecast on Wednesday, September, 20: exchange rate 1.076 US Dollars, maximum 1.092, minimum 1.060.
In 1 week, Euro to US Dollar forecast on Thursday, September, 21: exchange rate 1.073 US Dollars, maximum 1.089, minimum 1.057. EUR to USD forecast on Friday, September, 22: exchange rate 1.073 US Dollars, maximum 1.089, minimum 1.057. Euro to US Dollar forecast on Monday, September, 25: exchange rate 1.066 US Dollars, maximum 1.082, minimum 1.050. EUR to USD forecast on Tuesday, September, 26: exchange rate 1.068 US Dollars, maximum 1.084, minimum 1.052. Euro to US Dollar forecast on Wednesday, September, 27: exchange rate 1.061 US Dollars, maximum 1.077, minimum 1.045.
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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