Forex Forecast: 21 – 25 February 2022

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Long on the currency pair at or below 1.1555, setting a Stop loss at 1.1452, and Short it at or above 1.1675, setting a Stop loss at 1.17.

This week, EURUSD price range was 1.1396 high set yesterday, Wednesday, and 1.1279 set this past Monday. So and if we have kept our trading discipline and followed our last week technical trading recommendations, there was no trading opportunity this week, so far.

  Fundamental Overview

EURUSD has managed to advance toward 1.1400 on Wednesday but reversed its direction early Thursday with the latest geopolitical headlines weighing on risk sentiment. Although the pair staged a rebound after falling toward 1.1320, it seems to be having a difficult time gathering bullish momentum.

News of Ukraine firing mortar shells on separatists’ positions in east Ukraine forced investors to seek refuge in the late Asian session and caused the shared currency to weaken against the greenback. Although Ukraine denied these claims, investors remain on edge amid contradicting reports about the state of Russian troops.

“We continue to see forces, especially forces that would be in the vanguard of any renewed aggression against Ukraine, continuing to be at the border, to mass at the border,” US Secretary of State Antony Blinken told MSNBC. On the flip side, the Russian defense ministry said that 10 military convoys have left Crimea after completing military drills.

As it currently stands, EURUSD’s next move depends on the developments surrounding the Russia-Ukraine conflict. In case the west confirms that Russian forces are pulling back, the euro could find demand on improving market mood. On the other hand, the dollar is likely to preserve its strength as long as the geopolitical uncertainty persists.

Later in the session, the US Department of Labor will release the weekly Initial Jobless Claims data and the US Census Bureau will publish January Housing Starts and Building Permits figures. On Wednesday, the impressive Retail Sales data from the US failed to trigger a noticeable market reaction, confirming the view that the risk perception will remain the primary market driver.

Technical Analysis

EURUSD is trading under pressure around 1.1350 amid a renewed risk-aversion wave on news that Ukraine violated the ceasefire. The US dollar found a fresh bid on escalating Russia-Ukraine geopolitical tensions, following the less hawkish Fed minutes. ECB, Fed-speaks awaited.

 

Although the near-term technical outlook shows that buyers remain active, a negative shift in risk sentiment could cause investors to ignore technical signs. Nevertheless, the pair holds above the 100-period and the 200-period SMAs on the four-hour chart and the Relative Strength Index (RSI) indicator is edging higher toward 60.

The first hurdle is located at 1.1400 (psychological level, Fibonacci 23.6% retracement of the latest uptrend) ahead of 1.1450 (static level) and 1.1480 (static level).

On the downside, key support seems to have formed at the 1.1340/1.1350 area (Fibonacci 38.2% retracement, 200-period SMA) before 1.1320 (100-period SMA) and 1.1300 (psychological level, Fibonacci 50% retracement).

For next week, as illustrated in the following chart, our technical analysis is suggesting to go Long on the currency pair at or below around 1.1350, setting a Stop loss at 1.12905, and Short it at or above 1.1372, setting a Stop loss at 1.1475.

 

As of 11:28 AM (GMT), the EURUSD was trading at 1.1370.

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, February, 18: exchange rate 1.1410 Dollars, maximum 1.1581, minimum 1.1239. EUR to USD forecast on Monday, February, 21: exchange rate 1.1460 Dollars, maximum 1.1632, minimum 1.1288. Euro to Dollar forecast on Tuesday, February, 22: exchange rate 1.1421 Dollars, maximum 1.1592, minimum 1.1250. EUR to USD forecast on Wednesday, February, 23: exchange rate 1.1350 Dollars, maximum 1.1520, minimum 1.1180.

 

In 1 week, Euro to Dollar forecast on Thursday, February, 24: exchange rate 1.1341 Dollars, maximum 1.1511, minimum 1.1171. EUR to USD forecast on Friday, February, 25: exchange rate 1.1350 Dollars, maximum 1.1520, minimum 1.1180. Euro to Dollar forecast on Monday, February, 28: exchange rate 1.1328 Dollars, maximum 1.1498, minimum 1.1158. EUR to USD forecast on Tuesday, March, 1: exchange rate 1.1315 Dollars, maximum 1.1485, minimum 1.1145. Euro to Dollar forecast on Wednesday, March, 2: exchange rate 1.1326 Dollars, maximum 1.1496, minimum 1.1156.

 

 

 

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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