Forex Forecast: 23 – 27 August 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Long on the currency pair at or below 1.17, setting a stop loss at 1.16, and to Short it, in the very short-term at or above 1.1750 setting a stop loss at 1.1850.
This week, EURUSD price range was 1.1802 high, set this past Monday, and 1.1666 low, set today, Thursday. Hence, we could have short the currency pair on Monday at 1.1800, covering it on an intraday trading at 1.1769, for 0.2% profit. Tuesday, we could have bought it at 1.1706, selling it on an intraday trading at 1.1784, for 0.67% profit. Wednesday, we could have bought it at 1.1692, selling it on an intraday trading at 1.1741, for 0.42% profit. Today, Thursday, we could have bought it at 1.1664, selling it on an intraday trading at 1.1702, for an extra 0.33% ROI.
The EURUSD pair recovers modestly from a fresh 2021 low of 1.1665, now trading around the 1.1700 mark. Financial markets are in risk-off mode, following the release of the FOMC Meeting Minutes on Wednesday, indicating that US policymakers have escalated their tapering discussions, with speculative interest rushing to price in an announcement next September in Jackson Hole.
Ahead of Wall Street’s opening, European indexes trade in the red, dragging US futures to their lowest for August. At the same time, demand for safety had pushed government bonds higher and yields to fresh weekly lows.
US data was mixed, as the August Philadelphia Fed Manufacturing Survey contracted to 19.4, missing expectations, while Initial Jobless Claims for the week ended August 13 unexpectedly improved to 348K. Earlier in the day, the EU published the June Current Account, which posted a seasonally-adjusted surplus of €21.8 billion.
EURUSD pressured around 1.17 after Fed minutes, on risk-off mood, trading at the lowest since November 2020. The dollar is gaining ground after the Fed´s meeting minutes signaled tapering of its bond-buying scheme is on the agenda. US jobless claims shrank to 348K beating expectations.
The EURUSD pair corrects oversold conditions, although the risk remains skewed to the downside. The above 4-hour chart shows that the pair keeps developing far below a bearish 20 SMA, while the longer ones remain far above the latter.
Technical indicators are recovering modestly but remain well into negative territory. The pair could recover up to 1.1750, although sellers will likely defend the level.
Support levels are at 1.1660, 1.1620, and 1.1570. Resistance levels are at 1.1750, 1.1790, and 1.1830.
For next week, EURUSD on the following 4h chart is moving a descending channel over a weekly support. The price after the last bounce over the structure tested the 0.5 Fibonacci level and according to Plancton’s strategy, if the market will break below we can set a nice short order. Hence, our technical indicators suggest to go Short on the currency pair at or above 1.17105, setting a stop loss at 1.1750, and to go Long at or below 1.16588, setting a stop loss at 1.1750.
As of 04:12 PM (GMT+1), the EURUSD was trading at 1.16812.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, August, 20: exchange rate 1.1712 Dollars, maximum 1.1888, minimum 1.1536. EUR to USD forecast on Monday, August, 23: exchange rate 1.1689 Dollars, maximum 1.1864, minimum 1.1514. Euro to Dollar forecast on Tuesday, August, 24: exchange rate 1.1689 Dollars, maximum 1.1864, minimum 1.1514. EUR to USD forecast on Wednesday, August, 25: exchange rate 1.1692 Dollars, maximum 1.1867, minimum 1.1517.
In 1 week, In 1 week Euro to Dollar forecast on Thursday, August, 26: exchange rate 1.1686 Dollars, maximum 1.1861, minimum 1.1511. EUR to USD forecast on Friday, August, 27: exchange rate 1.1705 Dollars, maximum 1.1881, minimum 1.1529. Euro to Dollar forecast on Monday, August, 30: exchange rate 1.1587 Dollars, maximum 1.1761, minimum 1.1413. EUR to USD forecast on Tuesday, August, 31: exchange rate 1.1587 Dollars, maximum 1.1761, minimum 1.1413. Euro to Dollar forecast on Wednesday, September, 1: exchange rate 1.1587 Dollars, maximum 1.1761, minimum 1.1413.
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.