Last week, our technical indicators suggested going Long at or below 1.08 setting a Stop Loss at 1.07, and going Short above 1.08, setting a Stop Loss at 1.09.
This week, the EURUSD price range was 1.0948 high, set yesterday, Wednesday, and 1.0871 low, set this past Tuesday. So, on Monday, we could have short the currency pair at 1.09, covering it on an intraday trading at 1.0884, for 0.14% profit. Tuesday, we could have short it at 1.09, covering it on an intraday trading at 1.0872, for 0.26% profit. Wednesday, we could have short it at 1.09, covering it on an intraday trading at 1.0896, for an extra 0.04% ROI.
Fundamental Overview
The EURUSD extended its weekly rally and touched its highest level since mid-March near 1.0950 on Wednesday. The pair stays in a consolidation phase below this level as investors wait for the European Central Bank (ECB) to announce monetary policy decisions.
The persistent selling pressure surrounding the US Dollar (USD) fuelled another leg higher in EURUSD midweek. In the absence of high-tier data releases, dovish comments from Federal Reserve (Fed) officials didn’t allow the USD to stage a rebound.
The ECB is widely expected to leave monetary policy settings unchanged after having lowered key rates by 25 basis points in June.
Investors will scrutinize the statement language and comments from ECB President Christine Lagarde in the post-meeting press conference to figure out whether the ECB will lower key rates again in September.
In case Lagarde adopts an optimistic tone regarding the inflation outlook, the Euro could come under selling pressure even if she refrains from confirming a rate cut in September. On the other hand, the Euro could stay resilient against its rivals if Lagarde reiterates the data-dependent approach and voices concerns over upside risks to inflation.
The US economic docket will feature weekly Initial Jobless Claims data, which is forecast to come in at 230,000 following the 222,000 reported in the previous week. A reading above the market expectation could make it difficult for the USD to find demand, while a print below 220,000 could have the opposite impact on the USD valuation.
Technical Analysis
The currency pair consolidates below 1.0950 ahead of ECB policy announcements.
The EURUSD turns sideways below 1.0950 in Thursday’s European session after rallying to a fresh four-month high on Wednesday. The pair trades with caution, as investors shift to the sidelines ahead of the European Central Bank policy meeting, which will be announced at 12:15 GMT.
The EURUSD stays within the ascending regression channel coming from late June and the Relative Strength Index (RSI) indicator on the above 4-hour chart holds above 60, suggesting that the pair remains technically bullish.
The currency pair could face first resistance at 1.0950 (static level, mid-point of the ascending channel) before 1.0980 (upper limit of the ascending channel), 1.1000 (psychological level, static level) and 1.1030 (static level). On the downside, the lower limit of the ascending channel forms key support at 1.0900 ahead of 1.0870 (50-period Simple Moving Average) and 1.0840 (static level).
For next week, our technical analysis is suggesting going Long at or below 1.08900 setting a Stop Loss at 1.0730, and going Short at or above 1.09, setting a Stop Loss at 1.10.
As of 12:32 PM (GMT+1), the EURUSD was trading at 1.09289.
EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, July, 19: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082. EUR to USD forecast on Monday, July, 22: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082. Euro to US Dollar forecast on Tuesday, July, 23: exchange rate 1.097 US Dollars, maximum 1.113, minimum 1.081. EUR to USD forecast on Wednesday, July, 24: exchange rate 1.101 US Dollars, maximum 1.118, minimum 1.084.
In 1 week, Euro to US Dollar forecast on Thursday, July, 25: exchange rate 1.105 US Dollars, maximum 1.122, minimum 1.088. EUR to USD forecast on Friday, July, 26: exchange rate 1.106 US Dollars, maximum 1.123, minimum 1.089. Euro to US Dollar forecast on Monday, July, 29: exchange rate 1.105 US Dollars, maximum 1.122, minimum 1.088. EUR to USD forecast on Tuesday, July, 30: exchange rate 1.103 US Dollars, maximum 1.120, minimum 1.086. Euro to US Dollar forecast on Wednesday, July, 31: exchange rate 1.106 US Dollars, maximum 1.123, minimum 1.089.
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.
