Forex Forecast: 20 – 24/07/2020

How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement


EURUSD Rates Week in Review

Last week, our technical indicators suggested go Long on the EURUSD between 1.129 and 1.12, and Shorting it at around 1.11786, as the following chart illustrates. This past Monday, we could have bought the EURUSD at 1.1297, selling it today at 1.1443, realizing a 1.29% profit.


Fundamental Overview

The EURUSD pair fell this Thursday to 1.1377, as the dollar recovered some ground on the back of fading optimism. The US reported over 70,000 new coronavirus contagions in the last 24 hours, with the focus in the southern states. Furthermore, tensions between the US and China have mounted, as the US government is considering a travel ban on Chinese communist party members, a move that for sure trigger retaliation from the world’s second-largest economy. In a world already hit by the economic pandemic, tensions between these two economies surely won’t help.


The ECB had a monetary policy meeting, yet, as widely anticipated, policymakers left its current policy unchanged and reiterated they stand ready to act as appropriate. The EUR/USD pair recovered the 1.1400 threshold ahead of the event, maintaining a positive bias and advancing modestly above the level.


US data were generally encouraging, as Retail Sales jumped 7.5% in June, beating the market’s expectations. The Philadelphia Fed Manufacturing Survey came in at 24.1 in July, better than the 20 expected. Initial Jobless Claims for the week ended July 10 were a miss, surging to 1.3 million, although Continuing Jobless Claims improved by more than anticipated, printing at 17.338 million in the week ended July 3.


Technical Analysis

EURUSD advances above 1.14 after unchanged ECB, mixed US data. As of 5:36 PM, GMT+1, the EURUSD is trading at 1.1417, higher after the ECB left policy unchanged and called governments to act. US retail sales beat with 7.5% while jobless claims disappointed with 1.3 million. US coronavirus figures are showing further increases in cases.



The EURUSD pair is hovering around 1.1420, and bullish according to the above 4-hour chart. The early decline was contained by a bullish 20 SMA, which continues to advance above the larger ones. Technical indicators, in the meantime, turned marginally higher within positive levels, skewing the risk to the upside without confirming it, amid the lack of momentum. The main resistance continues to be the 1.1460 price zone, with a break above it, exposing the yearly high at 1.1496.


Support levels are at 1.1380, 1.1345, and 1.1300, while Resistance levels are at 1.1460, 1.1495, and 1.1530/


For next week, our technical indicators suggest to short the currency pair at 1.1414 and to cover it at around 1.1350. Long positions, may be entered at 131350 for a target selling price of 1.1491 as the following chart illustrates.




EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, July, 17: exchange rate 1.1426 Dollars, maximum 1.1597, minimum 1.1255. EUR to USD forecast on Monday, July, 20: exchange rate 1.1481 Dollars, maximum 1.1653, minimum 1.1309. Euro to Dollar forecast on Tuesday, July, 21: exchange rate 1.1532 Dollars, maximum 1.1705, minimum 1.1359. EUR to USD forecast on Wednesday, July, 22: exchange rate 1.1545 Dollars, maximum 1.1718, minimum 1.1372.



In 1 week, Euro to Dollar forecast on Thursday, July, 23: exchange rate 1.1497 Dollars, maximum 1.1669, minimum 1.1325. EUR to USD forecast on Friday, July, 24: exchange rate 1.1553 Dollars, maximum 1.1726, minimum 1.1380. Euro to Dollar forecast on Monday, July, 27: exchange rate 1.1519 Dollars, maximum 1.1692, minimum 1.1346. EUR to USD forecast on Tuesday, July, 28: exchange rate 1.1581 Dollars, maximum 1.1755, minimum 1.1407. Euro to Dollar forecast on Wednesday, July, 29: exchange rate 1.1591 Dollars, maximum 1.1765, minimum 1.1417.


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 nor KeySoft. 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 the future performance of the EUR/USD.

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