Forex Forecast: 22 – 26 November 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to Short the currency pair at or above 1.1555, setting a Stop Loss at 1.16, and to go Long at or below 1.15, setting a Stop Loss 1.14.
This week, EURUSD price range was 1.1465 high, set this past Monday, and 1.1314 low, set today, Thursday. Even though, our past week technical analysis suggested the probability of the currency pair to go lower was high, managing trading risk was key throughout this past week. So, if we kept our trading strategy discipline on our past week technical analysis recommendations, Monday, we could have bought the currency pair at 1.14, selling it on an intraday trading at 1.1463, for 0.55% profit.
EURUSD has managed to close yesterday above 1.1300 and seems to have gone into a consolidation phase in the early European session, today, Thursday.
The technical outlook suggests that the recovery could continue but the pair remains at the mercy of the dollar’s valuation.
The benchmark 10-year US Treasury bond yield, which gained more than 10% since the US inflation data on November 10, fell nearly 3% on Wednesday and caused the greenback to lose interest. Currently, the yield is holding below 1.6% and unless it manages to reclaim that level, the dollar could find it difficult to regather its strength.
Additionally, US stock futures are trading in the positive territory, suggesting that risk flows could support EURUSD on Thursday.
Nevertheless, sellers are unlikely to give up easily on the possibility of the pair falling further. European Central Bank (ECB) Governing Council Member Isabel Schnabel said that the ECB’s decision to continue to buy bonds was a sign that a rate hike was not imminent. Schnabel further added that the rise in inflation was a welcome development.
There won’t be any high-tier macroeconomic data releases in the remainder of the day and market participants will remain focused on the US T-bond yields and the risk perception.
EUR/USD continues to trade in the positive territory above 1.1300 on Thursday as investors await the next catalyst. The US Dollar Index stays on the back foot with the benchmark 10-year US Treasury bond yield struggling to move above 1.6%. Focus shifts to mid-tier data releases from the US.
Following the sharp decline witnessed earlier in the week, the Relative Strength Index (RSI) indicator on the four-hour chart rose above 30, which could be seen as an encouraging sign for the bulls. Additionally, EURUSD is currently trading above the descending regression channel coming from November 9. In case sellers fail to bring the pair back within that channel, additional recovery gains could be witnessed.
1.1340 (static level) aligns as initial resistance before the 1.1350/60 area (static level, 20-period SMA). With a daily close above the latter, EURUSD could target 1.1400 in the near term.
On the upside, 1.1300 (psychological level, descending regression channel) could be seen as the first support ahead of 1.1260 (16-month low) and 1.1200 (psychological level).
For next week, according to our technical analysis illustrated in the following chart, it is recommending to go Long at or below 1.1416, setting a Stop Loss at 1.1280, and to Short the currency pair at or above 1.1450, setting a Stop Loss at 1.16.
As of 12:17 PM (GMT), the EURUSD was trading at 1.13421.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, November, 19: exchange rate 1.1316 Dollars, maximum 1.1486, minimum 1.1146. EUR to USD forecast on Monday, November, 22: exchange rate 1.1273 Dollars, maximum 1.1442, minimum 1.1104. Euro to Dollar forecast on Tuesday, November, 23: exchange rate 1.1199 Dollars, maximum 1.1367, minimum 1.1031. EUR to USD forecast on Wednesday, November, 24: exchange rate 1.1193 Dollars, maximum 1.1361, minimum 1.1025.
In 1 week, Euro to Dollar forecast on Thursday, November, 25: exchange rate 1.1164 Dollars, maximum 1.1331, minimum 1.0997. EUR to USD forecast on Friday, November, 26: exchange rate 1.1054 Dollars, maximum 1.1220, minimum 1.0888. Euro to Dollar forecast on Monday, November, 29: exchange rate 1.1060 Dollars, maximum 1.1226, minimum 1.0894. EUR to USD forecast on Tuesday, November, 30: exchange rate 1.1082 Dollars, maximum 1.1248, minimum 1.0916. Euro to Dollar forecast on Wednesday, December, 1: exchange rate 1.1092 Dollars, maximum 1.1258, minimum 1.0926.
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.