Forex Forecast: 24 – 28/08/2020
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 to go long on the currency pair at 1.18 with a target selling price at 1.1860, and short it at or above 1.1880, with 1.20 stop loss. We also added that the currency pair would be consolidating between 1.18600 and 1.1800. Throughout this week, the EURUSD hight was 1.1967 and the low was set today, Thursday, at 1.1803. Hence, we could have bought the EURUSD, Monday at 1.1882, and selling it Tuesday at 1.1954, realizing 0.61% ROI. This past Tuesday, we could have shorted it at 1.1967, covering it today at 1.1803, profiting 1.37%. Yesterday, we could have shorted it again at 1.1954, covering it today at 1.1803, locking in an extra 1.26% ROI.
A scarce macroeconomic calendar and a sour mood, with equities in the red worldwide, are keeping investors in the side-lines.
Market players are still trying to digest a dovish US Federal Reserve statement, with policymakers concerned about the future economic recovery.
Data coming from the EU this morning failed to impress, as Construction Output was up 4.04% MoM in June, down from 29.37% in the previous month. When compared to a year earlier, it shrank 5.9%. As for the US, the country published the Philadelphia Fed Manufacturing Survey, which resulted in 17.2 in August, missing expectations of 21. Initial Jobless Claims in the week ended August 14 surged to 1106K worse than the 925K expected.
EURUSD returns to daily highs in the 1.1860 price zone, as the dollar’s demand got hit by dismal US employment figures. Also, advancing equities provide support to high-yielding assets.
The EURUSD pair is trading with modest gains ahead of Wall Street´s opening, although the short-term picture shows that the risk is skewed to the downside. In the 4-hour chart, a flat 100 SMA provides support around the daily low, while the 20 SMA gains bearish strength above the current level. Technical indicators, in the meantime, remain within negative levels lacking directional strength.
For next week and as shown in the following EURUSD daily chart, our technical indicators suggest to go long at or above 1.1830 and short it at or above 1.19, setting a stop loss at 1.20.
We continue to expect further consolidation on the EURUSD between 1.19 and 1.1830. As of 6:00 PM (GMT+1), the EURUSD was trading at 1.1854.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, August, 21: exchange rate 1.1828 Dollars, maximum 1.2005, minimum 1.1651. EUR to USD forecast on Monday, August, 24: exchange rate 1.1893 Dollars, maximum 1.2071, minimum 1.1715. Euro to Dollar forecast on Tuesday, August, 25: exchange rate 1.1914 Dollars, maximum 1.2093, minimum 1.1735. EUR to USD forecast on Wednesday, August, 26: exchange rate 1.1939 Dollars, maximum 1.2118, minimum 1.1760.
In 1 week, Euro to Dollar forecast on Thursday, August, 27: exchange rate 1.1966 Dollars, maximum 1.2145, minimum 1.1787. EUR to USD forecast on Friday, August, 28: exchange rate 1.1987 Dollars, maximum 1.2167, minimum 1.1807. Euro to Dollar forecast on Monday, August, 31: exchange rate 1.2009 Dollars, maximum 1.2189, minimum 1.1829. EUR to USD forecast on Tuesday, September, 1: exchange rate 1.1990 Dollars, maximum 1.2170, minimum 1.1810. Euro to Dollar forecast on Wednesday, September, 2: exchange rate 1.1877 Dollars, maximum 1.2055, minimum 1.1699.
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 the future performance of the EUR/USD.