Forex Forecast: 19-23 September 2022
EURUSD Rates Week in Review
Last week, our technical indicators suggested to Buy the currency pair at or below 1.0017, setting a Stop Loss at 0.98, and Shorting it above 1.0017, setting a Stop Loss at 1.0179.
This week, EURUSD price range was 1.0199 high, set this past Monday, and 0.9955 low, set yesterday Wednesday. So, Monday, we could have Short the currency pair at 1.0197, covering it on an intraday trading at 1.0061, for 1.33% profit. Tuesday, we could have Bought it at 0.9968, selling it on an intraday trading at 1.0186, for 2.19% profit. Also, Tuesday, we could have Short it at 1.0186, covering it on an intraday trading at 0.9968, for 2.19% profit. Wednesday, we could have Short it at 1.0022, covering it on an intraday trading at 0.9957, for 0.65% profit. Thursday, we could have Bought the currency pair at 0.9958, selling it on an intraday trading at 0.9998, for an extra 0.4% ROI.
EURUSD has been having a difficult time making a decisive move in either direction following the sharp decline witnessed on Tuesday. The pair needs to break above parity to attract buyers and 0.9950 aligns as key support in the near term.
Amid a lack of high-impact macroeconomic data releases, EURUSD ended up closing flat on Wednesday. European Central Bank (ECB) policymaker Francois Villeroy de Galhau said that he estimates the euro area neutral rate at below or close to 2% and added that they could reach it by the end of the year. These comments, however, failed to provide a boost to the shared currency. On the other hand, the dollar rally lost its steam with Wall Street’s main indexes staging a rebound after the opening bell.
US stock index futures trade little changed so far on Thursday, suggesting that the risk perception is unlikely to provide a directional clue in the second half of the day.
Nevertheless, market participants will keep a close eye on macroeconomic data releases from the US. The weekly Initial Jobless Claims have been declining steadily in the past few weeks and another lower-than-expected reading could help the dollar hold its ground. Moreover, Retail Sales are forecast to remain unchanged in August. Since the Retail Sales number is not adjusted for price changes, it’s difficult to tell how the market would react but it would be fair to say that today’s data releases are unlikely to change how markets are pricing in next week’s Fed rate decision.
However, the question remains: can consumers keep up with inflation?
A breather could weigh on the dollar.According to the CME Group FedWatch Tool, the probability of a 100 basis points Fed rate hike stands at 28%, down slightly from 31% on Wednesday.
EURUSD is recovering towards 1.0000, helped by a retreat in the US dollar amid a better market mood. Investors assess the impact of the aggressive Fed rate hike bets ahead of the US Retail Sales data.
The Fibonacci 61.8% retracement of the latest uptrend forms key resistance at 1.0000. The 60 and the 100-period SMAs on the four-hour chart reinforce that level as well. In case EUR/USD manages to flip that level into support, it could target the 1.0030/40 area (Fibonacci 50% retracement, 20-period SMA) and the 1.0070/80 area (Fibonacci 38.2% retracement, 200-period SMA).
On the downside, sellers could take action with a drop below 0.9950 (static level) and cause EURUSD to decline toward 0.9900 (psychological level) and 0.9865 (September 6 low).
For next week, the following 1-day chart, our technical analysis illustrate both possible scenarios. The bullish EURUSD chart indicated a Fed decision to increase Interest Rates by 50 bps, and the bearish EURUSD chart, the Fed increases the discount interest rate by 75 or more basis point.
Hence, our technical analysis charts are suggesting to Buy the currency pair at or below 1.01 setting a Stop Loss at 0.98, and Shorting it above 1.00, setting a Stop Loss at 1.0182.
If the ECB rates by 0.75 basis point, the EURUSD may go higher in the very short-term, before resuming its downtrend below parity.
As of 12:32 PM (GMT+1), the EURUSD was trading at 0.99851.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, September, 16: exchange rate 0.9997 Dollars, maximum 1.0147, minimum 0.9847. EUR to USD forecast on Monday, September, 19: exchange rate 0.9844 Dollars, maximum 0.9992, minimum 0.9696. Euro to Dollar forecast on Tuesday, September, 20: exchange rate 0.9920 Dollars, maximum 1.0069, minimum 0.9771. EUR to USD forecast on Wednesday, September, 21: exchange rate 0.9964 Dollars, maximum 1.0113, minimum 0.9815.
In 1 week, Euro to Dollar forecast on Thursday, September, 22: exchange rate 0.9953 Dollars, maximum 1.0102, minimum 0.9804. EUR to USD forecast on Friday, September, 23: exchange rate 1.0059 Dollars, maximum 1.0210, minimum 0.9908. Euro to Dollar forecast on Monday, September, 26: exchange rate 1.0031 Dollars, maximum 1.0181, minimum 0.9881. EUR to USD forecast on Tuesday, September, 27: exchange rate 1.0010 Dollars, maximum 1.0160, minimum 0.9860. Euro to Dollar forecast on Wednesday, September, 28: exchange rate 1.0017 Dollars, maximum 1.0167, minimum 0.9867.
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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