Forex Forecast: 22 – 26/06/2020
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 going long, based on the technical “Bat” formation, suggesting a buy entry price at 1.13813, and stop loss at 1.12 for profit-taking at or above 1.15. This week the high for the EURUSD was set Tuesday at 1.1353, hence it did not trigger our long position.
The EURUSD pair failed to capitalize on its early uptick to the 1.1300 neighbourhood, instead met with some fresh supply and dropped to two-week lows on Wednesday. The early optimism across the global equity markets faded rather quickly amid concerns over a surge in new coronavirus cases and rising geopolitical tensions in Asia. This, in turn, forced investors to take refuge in the safe-haven US dollar, which exerted some pressure on the major for the second straight session.
On the economic data front, the final Euro-zone consumer inflation figures matched preliminary estimates and did little to provide any meaningful impetus to the shared currency. The headline CPI was finalized at 0.1% YoY rate in May, down from 0.3% previous, while core CPI (ex-energy, food, alcohol & tobacco) came in at 0.9% YoY, again unchanged from April’s reading. The pair dived nearly 100 pips from daily tops, albeit managed to find decent support near the 1.1200 mark.
The pair built on the overnight late rebound and gained some traction during the Asian session on Thursday despite the prevalent risk-off mood. In the absence of any major market-moving economic releases from the Euro-zone, the release of the ECB Economic Bulletin might influence the common currency. Later during the early North American session, the US macro data will be looked upon for some meaningful trading opportunities. Thursday’s US economic docket highlights the release of Initial Weekly Jobless Claims and Philly Fed Manufacturing Index.
The EURUSD seems to be stabilizing as US jobless claims miss. The EURUSD is trading at 1.1206 as of 5:35 PM (GMT+1), consolidating minimal losses. US initial and continuing claims missed expectations while the Philly Fed figure jumped back to positive territory. Coronavirus concerns are weighing on stocks, supporting the dollar.
From a technical perspective, bearish traders are likely to wait for a sustained breakthrough the 1.1200 mark before positioning for any further near-term depreciating move. Below the mentioned level, the pair is likely to accelerate the slide towards the 1.1135-30 support zone en-route the 1.1100 mark. Some follow-through selling has the potential to drag the pair back towards the very important 200-day SMA, around the 1.1025-20 region.
On the flip side, the 1.1300 mark now seems to have emerged as immediate resistance and is closely followed by the 1.1325 supply zone. A sustained strength beyond the mentioned barriers should assist the pair to make a fresh attempt to conquer the 1.1400 mark. The subsequent positive move might be seen as a fresh trigger for bullish traders and set the stage for a move towards testing YTD tops, just ahead of the key 1.1500 psychological mark.
For next week, The EURUSD was able to take the price around 1.12, but bears were unable to break this key level. So, sellers must be careful now. If EURUSD does not drop below 1.12, then buyers can step in once again and take the price to the 1.14, the Resistance level. Hence, for next week, our technical indicators suggest to go Short on the EURUSD at 1.1195, with a stop loss at 1.1254, and covering the short position at 1.11. On the other hand, if the currency pair breaks on the upside 1.12, a long position should be set at 1.1254, closing the long position at 1.14.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, June, 19: exchange rate 1.1235 Dollars, maximum 1.1404, minimum 1.1066. EUR to USD forecast on Monday, June, 22: exchange rate 1.1174 Dollars, maximum 1.1342, minimum 1.1006. Euro to Dollar forecast on Tuesday, June, 23: exchange rate 1.1239 Dollars, maximum 1.1408, minimum 1.1070. EUR to USD forecast on Wednesday, June, 24: exchange rate 1.1202 Dollars, maximum 1.1370, minimum 1.1034
In 1 week, Euro to Dollar forecast on Thursday, June, 25: exchange rate 1.1120 Dollars, maximum 1.1287, minimum 1.0953. EUR to USD forecast on Friday, June, 26: exchange rate 1.1157 Dollars, maximum 1.1324, minimum 1.0990. Euro to Dollar forecast on Monday, June, 29: exchange rate 1.1202 Dollars, maximum 1.1370, minimum 1.1034. EUR to USD forecast on Tuesday, June, 30: exchange rate 1.1207 Dollars, maximum 1.1375, minimum 1.1039. Euro to Dollar forecast on Wednesday, July, 1: exchange rate 1.1160 Dollars, maximum 1.1327, minimum 1.0993.
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 future performance of the EUR/USD.