Forex Forecast: 20 – 24 March 2023
Last week, our technical indicators suggested going Long at or below 1.06, setting a Stop Loss at 1.05, and going Short at or above 1.065, setting a Stop Loss at 1.07338.
This week, EURUSD price range was 1.0761 high and 1.0516 low, both set yesterday, Wednesday. So, Monday, we could have short currency pair at 1.0747, covering it on an intraday trading at 1.0649, for 0.91% profit. Tuesday, we could have short it at 1.0748, covering it on an intraday trading at 1.0680, for 0.63% profit. Wednesday, we could have short it at 1.0759, covering it on an intraday trading at 1.0518, for 2.24% profit. Today, we could have bought it at 1.0575, selling it on an intraday trading at 1.0634, for an extra 0.56% ROI.
EURUSD has gathered recovery momentum and advanced beyond 1.0600 early Thursday after having suffered heavy losses on Wednesday. The European Central Bank’s (ECB) policy announcements and its approach to market turmoil could drive the Euro’s valuation in the second half of the day.
Flight to safety intensified on Wednesday as news of Credit Suisse’s inability to receive additional financial support from Saudi National Bank revived fears over the financial crisis spreading to Europe. EUR/USD stayed under constant bearish pressure throughout the day and touched its lowest level since early January at 1.0515.
In the late American session, however, the Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) said in a statement that Credit Suisse met the capital requirements in case it needed to raise liquidity. In turn, EUR/USD managed to erase a small portion of its daily losses before the end of the day and extended its rebound during the Asian trading hours on Thursday.
Reflecting the improving market mood, Euro Stoxx 50 Index opened nearly 2% higher following Wednesday’s 3.5% decline.
Later in the day, the European Central Bank (ECB) is expected to raise its key rates by 50 basis points. Earlier in the week, several news outlets reported that dovish ECB policymakers were going to argue that the changing economic environment would warrant more caution in regard to aggressive policy tightening.
In case the ECB says that it can change its approach to policy tightening if it sees additional signs of stress in financial conditions in the Eurozone, the Euro is likely to have a hard time finding demand. On the flip side, the bank could downplay market jitters and note that it was an isolated event that is unlikely to occur again, markets are likely to expect additional big rate hikes. In that scenario, EURUSD is likely to remain bullish and extend its rebound.
If the ECB surprises the markets by opting for a 25 bps hike, that is likely to trigger an intense selloff in the Euro, at least with the immediate reaction.
EURUSD continues to trade in positive territory above 1.0550 on Thursday. The US Dollar stays on the back foot amid retreating US Treasury bond yields and helps the pair erase some of the losses it suffered after FOMC Chairman Jerome Powell’s hawkish surprise.
EURUSD was last seen trading in 1.0620/30 area, where the 50-period and the 10-period Simple Moving Averages (SMA) align. In case the pair stabilizes above that region, it could face interim resistance at 1.0660 (static level) before targeting 1.0690/1.0700 area (200-period SMA, psychological level, static level).
On the downside, first support is located at 1.0600 (psychological level, static level) ahead of 1.0530 (static level= and 1.0500 (psychological level).
For next week, the EURUSD currency pair was within an accumulation zone. After a rebound from the 1.075 resistance level, the price is now approaching a short impulse in the direction of the main trend. Additionally, the RSI indicator appears poised to drop from the overbought area. Based on this analysis, the recommendation is still for a short impulse.
Hence, our technical analysis are suggesting going Short at or above 1.065, setting a Stop Loss at 1.07780, and going Long at or below 1.06, setting a Stop Loss at 1.05.
As of 12:37 PM (GMT), the EURUSD was trading at 1.06142.
EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, March, 17: exchange rate 1.043 US Dollars, maximum 1.059, minimum 1.027. EUR to USD forecast on Monday, March, 20: exchange rate 1.043 US Dollars, maximum 1.059, minimum 1.027. Euro to US Dollar forecast on Tuesday, March, 21: exchange rate 1.052 US Dollars, maximum 1.068, minimum 1.036. EUR to USD forecast on Wednesday, March, 22: exchange rate 1.058 US Dollars, maximum 1.074, minimum 1.042.
In 1 week, Euro to US Dollar forecast on Thursday, March, 23: exchange rate 1.062 US Dollars, maximum 1.078, minimum 1.046. EUR to USD forecast on Friday, March, 24: exchange rate 1.061 US Dollars, maximum 1.077, minimum 1.045. Euro to US Dollar forecast on Monday, March, 27: exchange rate 1.048 US Dollars, maximum 1.064, minimum 1.032. EUR to USD forecast on Tuesday, March, 28: exchange rate 1.053 US Dollars, maximum 1.069, minimum 1.037. Euro to US Dollar forecast on Wednesday, March, 29: exchange rate 1.056 US Dollars, maximum 1.072, minimum 1.040.
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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