Forex Forecast: 2 -5 January 2023
Last week, our technical indicators suggested going Short at or above 1.07829, setting a Stop Loss at 1.08, and to go Long at or below 1.07594, setting a Stop Loss at 1.02.
This week, EURUSD price range was 1.0675 high set yesterday, Wednesday, and 1.0604 low set this past Monday. So, Monday, we could have bought the currency pair at 1.0606, selling it on an intraday trading at 1.0636, for 0.28% profit. Tuesday, we could have bought it at 1.0613, selling it on an intraday trading at 1.0668, for 0.52% profit. Wednesday, we could have bought it at 1.0608, selling it on an intraday trading at 1.0673, for 0.61% profit. Thursday, we could have bought it at 1.0613, selling it on an intraday trading at 1.0656, for an extra 0.41% ROI.
The EURUSD pair keeps trading within familiar levels on Thursday, bottoming during the Asian session at 1.0605 and peaking during European hours at 1.0657. Trading remains choppy amid a scarce economic calendar and due to the winter holidays in the Northern Hemisphere, although the market sentiment continues to deteriorate. The latest news from China does not seem encouraging, as the number of coronavirus cases has multiplied while the government moves away from its zero-covid policy.
Italy reported that roughly, 50% of the passengers of two flights arriving in Milan on Wednesday tested positive for COVID-19, and several western nations rushed to impose control on Chinese travelers, fearing a new strain could break the delicate balance in which they are living. It is still to be seen whether these latest developments will have long-lasting effects on growth and inflation. Meanwhile, China’s State Council announced it would adjust import and export tariffs of some goods starting January 1, detailing raising export tariffs on aluminum and aluminum alloys.
On the data front, the EU published November M3 Money Supply, which rose 4.8% YoY, beating expectations. The US will later release Initial Jobless Claims for the week ended December 23.
EURUSD is picking up fresh bids to trade around 1.0650 in typical pre-New Year thin market conditions. The pair is finding fresh demand from a mild improvement in risk sentiment, which is further weighing down on the US Dollar. US Jobless Claims data eyed.
The EURUSD pair trades around 1.0640, with the picture unchanged from the previous updates. Technical readings in the daily chart show that the pair has lost upward momentum, although the risk remains skewed to the upside. In the mentioned time frame, the pair develops above all of its moving averages, with a bullish 20 SMA providing dynamic support at around 1.0600.
The longer moving averages, in the meantime, lack directional strength far below the shorter one. Finally, technical indicators remain flat, with the Momentum just above its midline but the Relative Strength Index (RSI) holding near overbought readings.
In the near term, and according to the 4-hour chart, the pair retains the neutral stance. EURUSD develops above a mildly bullish 20 SMA, while the 100 SMA heads nowhere below it. The 200 SMA, however, maintains its bullish slope far below the latter.
Technical indicators have turned south but lack enough strength and are stuck to their midlines, reflecting the absence of speculative interest.
Support levels are at 1.0610, 1.0580, and 1.0535.
Resistance levels are at 1.0660, 1.0695, and 1.0740.
For next week, and as illustrated in the following chart, EURUSD is in the range of 1.064. Our technical indicators are looking for a suitable signal in the range of 1.067 to 1.07260 to SHORT again the currency pair. We expect the price downtrend to resume in the coming days and to continue after the holidays. Hence, our technical analysis are suggesting going Short at or above 1.0617, setting a stop loss at 1.07737, and to go Long at or below 1.0406, setting a stop loss at 1.0290.
As of 2:29 PM (GMT), the EURUSD was trading at 1.06573.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, December, 30: exchange rate 1.0599 Dollars, maximum 1.0758, minimum 1.0440. EUR to USD forecast on Monday, January, 2: exchange rate 1.0603 Dollars, maximum 1.0762, minimum 1.0444. Euro to Dollar forecast on Tuesday, January, 3: exchange rate 1.0612 Dollars, maximum 1.0771, minimum 1.0453. EUR to USD forecast on Wednesday, January, 4: exchange rate 1.0640 Dollars, maximum 1.0800, minimum 1.0480.
In 1 week, Euro to Dollar forecast on Thursday, January, 5: exchange rate 1.0633 Dollars, maximum 1.0792, minimum 1.0474. EUR to USD forecast on Friday, January, 6: exchange rate 1.0613 Dollars, maximum 1.0772, minimum 1.0454. Euro to Dollar forecast on Monday, January, 9: exchange rate 1.0630 Dollars, maximum 1.0789, minimum 1.0471. EUR to USD forecast on Tuesday, January, 10: exchange rate 1.0653 Dollars, maximum 1.0813, minimum 1.0493. Euro to Dollar forecast on Wednesday, January, 11: exchange rate 1.0606 Dollars, maximum 1.0765, minimum 1.0447.
Until next article, wishing all of you a wealthy trading and Happy New Year!
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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