Forex Forecast: 23 – 27 January 2023
Last week, our technical indicators suggested going Short at or above 1.07808, setting a stop loss at 1.09, and going Long at or below 1.06, setting a stop loss at 1.0525.
This week, EURUSD price range was 1.0889 high set yesterday, Wednesday, and 1.0766 low, also set yesterday. Following our trading discipline, we could have Short the currency pair on Monday at 1.0873, covering it on an intraday trading at 1.0803, for 0.64% profit. Tuesday, we could have Short it at 1.0868, covering it on an intraday trading at 1.0777, for 0.84% profit. Wednesday, we could have Short it at 1.0887, covering it on an intraday trading at 1.0768, for 1.09% profit. Today, we could have Short it at 1.0834, covering it on an intraday trading at 1.0784, for an extra 0.46% ROI.
On Thursday, the speech from the European Central Bank (ECB) President Christine Lagarde will guide investors about the likely monetary policy action in February. Declining energy prices in Eurozone have softened inflation, however, the current inflation rate is still far from the median rate. Therefore, investors should brace for a hawkish commentary from European Central Bank’s Lagarde ahead.
According to economists polled by Bloomberg, the deposit rate will be raised to a peak of 3.25% from its current level of 2% in three steps. The survey shows two half-point hikes at the February and March meetings, followed by a 25 basis-point increase in May or June.
Meanwhile, European Central Bank (ECB) policymaker Francois Villeroy de Galhau said on Wednesday, it’s “too early to speculate about what we will do in March.” However, he believed that Lagarde’s earlier 50 bps guidance is still valid.
EURUSD clings to gains above 1.0800 on ECB’s Lagarde.
The pair is supported by falling US Treasury yields, which are weighing on the US Dollar amid looming recession fears. ECB President Lagarde voices support for more rate hikes to tame inflation. ECB Minutes eyed.
EURUSD is looking to find support around the upward-sloping trendline of the Ascending Triangle chart pattern plotted from January 10 low at 1.0712 on an hourly scale. The horizontal resistance of the aforementioned chart pattern is placed from January 12 high at 1.0867.
The 20-period Exponential Moving Average (EMA) at 1.0800 is acting as a major barrier for the Euro. While, the 200-EMA at 1.0774 is still advancing, which indicates that the upside trend is still solid.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.
For next week, EURUSD continues to consolidate in the range of 1.08669 – 1.07573, testing the support, after which, the price again headed for the retest of the limit resistance.
The trend remains dominated by the Institution buyers, as a fairly confident position on the following chart can be interpreted as a possible continuation of growth.
Indeed, the price is in consolidation, but at the same time, there are attempts to break 1.08669. We believe in the near future, under the pressure of dynamic buyers and the strong trend, the bulls will win over the bears and break the resistance.
We are expecting a breakdown of 1.08669 and impulse formation. The short-term target is 1.0938; the medium-term target is 1.10500. Hence, our technical analysis are suggesting going Short at or above 1.0870, setting a stop loss at 1.1050, and going Long at or below 1.0869, setting a stop loss at 1.0753.
As of 12:77 PM (GMT), the EURUSD was trading at 1.08212.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, January, 20: exchange rate 1.0800 Dollars, maximum 1.0962, minimum 1.0638. EUR to USD forecast on Monday, January, 23: exchange rate 1.0766 Dollars, maximum 1.0927, minimum 1.0605. Euro to Dollar forecast on Tuesday, January, 24: exchange rate 1.0772 Dollars, maximum 1.0934, minimum 1.0610. EUR to USD forecast on Wednesday, January, 25: exchange rate 1.0747 Dollars, maximum 1.0908, minimum 1.0586.
In 1 week, Euro to Dollar forecast on Thursday, January, 26: exchange rate 1.0837 Dollars, maximum 1.1000, minimum 1.0674. EUR to USD forecast on Friday, January, 27: exchange rate 1.0863 Dollars, maximum 1.1026, minimum 1.0700. Euro to Dollar forecast on Monday, January, 30: exchange rate 1.0865 Dollars, maximum 1.1028, minimum 1.0702. EUR to USD forecast on Tuesday, January, 31: exchange rate 1.0954 Dollars, maximum 1.1118, minimum 1.0790. Euro to Dollar forecast on Wednesday, February, 1: exchange rate 1.1077 Dollars, maximum 1.1243, minimum 1.0911.
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.
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