Last week, our technical indicators suggested going Long at or below 1.07223, setting a Stop Loss at 1.0640, and going Short at or above 1.075, setting a Stop Loss at 1.08367.
This week, the EURUSD price range was 1.0896 high, set today, Thursday, and 1.0766 low, set this past Monday. So, on Monday, we could have short the currency pair at 1.0806, covering it on an intraday trading at 1.0767, for 0.36% profit. Tuesday, we could have short it at 1.0825, covering it on an intraday trading at 1.0769, for 0.52% profit. Wednesday, we could have short it at 1.08367, covering it on an intraday trading at 1.0814, for an extra 0.21% ROI.
Fundamental Overview
EURUSD gathered bullish momentum and climbed to its highest level in nearly two months above 1.0890. The pair stays in a consolidation phase early Thursday but holds comfortably above 1.0850 as market focus shifts to mid-tier data releases from the US and Fed-speak.
The broad-based selling pressure surrounding the US Dollar (USD) fueled EUR/USD’s rally midweek. The probability of the Federal Reserve (Fed) leaving the policy rate unchanged declined toward 25% from 35% after the April inflation report, per CME Fed-Watch Tool.
The US Bureau of Labor Statistics (BLS) reported on Wednesday that the Consumer Price Index (CPI) rose 3.4% on a yearly basis in April. The annual core CPI increased 3.6% in the same period. On a monthly basis, the CPI and the core CPI both rose 0.3%. In the meantime, the US Census Bureau reported that Retail Sales remained unchanged in April, missing the market expectation for an increase of 0.4%.
Later in the day, the weekly Initial Jobless Claims data will be featured in the US economic docket, alongside April Industrial Production, Building Permits and Housing Starts figures. Last week, the unexpected jump seen in the number of first-time applications for unemployment benefits triggered a USD selloff. In case weekly Jobless Claims arrive at or above 230K for the second consecutive week, the USD could continue to weaken against its rivals. On the other hand, a sharp drop toward 210K could help the USD find a foothold and limit EUR/USD’s upside.
Investors will also pay close attention to comments from Fed policymakers. Several Fed officials, including Cleveland Fed President Loretta Mester and Philadelphia Fed President Patrick Harker, are scheduled to speak during the American trading hours. In case policymakers dismiss the modest improvement seen in inflation data and reiterate that they will look for several more good inflation readings before cutting rates, investors could reassess the probability of a Fed rate cut in September and open the door for a rebound in the USD.
Technical Analysis
EURUSD consolidates below 1.0900 following Wednesday’s rally.
The currency pair trades in a tight range below 1.0900 after registering impressive gains on Wednesday. The US Dollar stays resilient against its peers following the CPI-inspired selloff as investors await mid-tier data releases and comments from Fed officials.
The Relative Strength Index (RSI) indicator on the following 4-hour chart stays above 70 and EURUSD trades above the upper limit of the ascending regression trend channel coming from mid-April, highlighting overbought conditions.
If EURUSD returns with the ascending channel by flipping 1.0870 (upper limit of the channel) into resistance, 1.0820 (100-day Simple Moving Average (SMA), mid-point of the channel) could act as strong support before 1.0790-1.0800 (50-day SMA, 200-day SMA).
On the upside, 1.0900 (static level, psychological level) aligns as first resistance before 1.0940 (static level) and 1.0980 (March 8 high).
For next week, strong news for USD today, so expecting consolidation, until NY session.
If we want to trade shorts in confluence with HTF, we need some breaks to the downside first.
Until then, it remains bullish from MTF and LTF.
Hence, our technical analysis is suggesting going Long at or below 1.0787, setting a Stop Loss at 1.0620, and going Short at or above 1.07871, setting a Stop Loss at 1.09.
As of 12:36 AM (GMT+1), the EURUSD was trading at 1.08650.
EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, May, 17: exchange rate 1.095 US Dollars, maximum 1.111, minimum 1.079. EUR to USD forecast on Monday, May, 20: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082. Euro to US Dollar forecast on Tuesday, May, 21: exchange rate 1.100 US Dollars, maximum 1.117, minimum 1.084. EUR to USD forecast on Wednesday, May, 22: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082.
In 1 week, Euro to US Dollar forecast on Thursday, May, 23: exchange rate 1.101 US Dollars, maximum 1.118, minimum 1.084. EUR to USD forecast on Friday, May, 24: exchange rate 1.101 US Dollars, maximum 1.118, minimum 1.084. Euro to US Dollar forecast on Monday, May, 27: exchange rate 1.099 US Dollars, maximum 1.115, minimum 1.083. EUR to USD forecast on Tuesday, May, 28: exchange rate 1.100 US Dollars, maximum 1.117, minimum 1.084. Euro to US Dollar forecast on Wednesday, May, 29: exchange rate 1.104 US Dollars, maximum 1.121, minimum 1.087.
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.
