Forex Forecast: 24 – 28 January 2022
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Short at or above 1.14, setting a Stop loss at 1.1525, and go Long at or below 1.1320, setting a Stop loss at 1.1995.
This week, EURUSD price range was 1.1436 high, set this past Monday, and 1.1314 low set this past Tuesday. So, Monday, we could have short it the currency pair at 1.1434, Covering it on an intraday trading at 1.1390, for 0.38% profit. Tuesday, we could have Short it the currency pair at 1.1420, Covering it on an intraday trading at 1.1312, for 0.95% profit. Also Tuesday, we could have gone Long on the currency pair, buying it at 1.1316, selling it on an intraday trading at 1.1420, for 0.92% profit. Wednesday, we could have bought the currency pair at 1.1320, selling it on an intraday trading at 1.1367, for 0.42% profit. Today, Thursday, so far there has been no trading opportunity, as the EURUSD intraday pricing range has been 1.1369-1.1331, away from our last week technical trading recommendations.
Fundamental Overview
The EURUSD pair eased from an intraday peak of 1.1368, trading in the 1.1350 area heading into the US opening. The greenback trades mixed across the FX board, weaker against commodity-linked currencies but grinding higher vs its European rivals. Financial markets are quieter on Thursday, with European stocks struggling for direction but stuck around their opening levels.
The EU published the December Consumer Price Index, which was confirmed at 5% YoY, while the core reading met the preliminary estimate posting 2.6%. Also, the European Central Bank posted the Accounts of its latest meeting, which showed that policymakers are aware of a possible “higher for longer” inflation scenario.
The US published Initial Jobless Claims for the week ended January 7, which unexpectedly jumped to 286K, much worse than the 220K expected. The Philadelphia Fed Manufacturing Survey surged from 15.4 to 23.2 in January, beating expectations. The news put some pressure on the greenback, now recovering from its daily low at 1.1330.
Technical Analysis
EURUSD stays directionless near 1.1350 after mixed US data. Indeed, EURUSD is struggling to find direction on Thursday and continues to fluctuate in a tight range around 1.1350. The data from the US showed that the weekly Initial Jobless Claims jumped to 286K from 231K. On a positive note, Philly Fed Manufacturing Index improved to 23.2 in January from 15.4.
The EURUSD pair could resume its decline in the upcoming sessions, as there are no technical signs of buying interest. The daily chart shows that the pair is incapable of advancing beyond a flat 20 SMA for a second consecutive day, while the Momentum indicator heads lower within negative levels. Additionally, the RSI is stable, although around 49.
Meanwhile, the pair keeps trading between Fibonacci levels, with immediate support at 1.1305, the 23.6% retracement of the 1.1691/1.1185 slide. The 38.2% retracement is located at 1.1385, providing strong resistance since mid-November.
In the near term, and according to the 4-hour chart, the pair maintains a neutral-to-bearish stance, trading below a firmly bearish 20 SMA but between directionless 100 and 200 SMA. Technical indicators, in the meantime, remain within negative levels, the Momentum advancing but the RSI flat at around 44.
Support levels are at 1.1305, 1.1260, and 1.1220.
Resistance levels are at 1.1385, 1.1440, and 1.1485.
For next week, It seems that has been confirmed the trend reversal on H1 (darker charter area), as illustrated in the following hourly chart, which may mean the beginning of a downside move. The best case scenario would be to see a rejection of the support at 1,1300 and then a pullback to around 1,1360-80. Those levels would provide us with a really good entry opportunities with targets 1,1190. According to the following two hour chart, our technical indicators are suggesting to go Long on the EURUSD at or below 1.13516, setting a Stop loss at 1.1911, and to go Short at or above 1.14, setting a Stop loss at 1.1525.
As of 2:18 PM (GMT), the EURUSD was trading at 1.13521.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, January, 21: exchange rate 1.1357 Dollars, maximum 1.1527, minimum 1.1187. EUR to USD forecast on Monday, January, 24: exchange rate 1.1278 Dollars, maximum 1.1447, minimum 1.1109. Euro to Dollar forecast on Tuesday, January, 25: exchange rate 1.1272 Dollars, maximum 1.1441, minimum 1.1103. EUR to USD forecast on Wednesday, January, 26: exchange rate 1.1228 Dollars, maximum 1.1396, minimum 1.1060.
In 1 week, In 1 week Euro to Dollar forecast on Thursday, January, 27: exchange rate 1.1242 Dollars, maximum 1.1411, minimum 1.1073. EUR to USD forecast on Friday, January, 28: exchange rate 1.1317 Dollars, maximum 1.1487, minimum 1.1147. Euro to Dollar forecast on Monday, January, 31: exchange rate 1.1358 Dollars, maximum 1.1528, minimum 1.1188. EUR to USD forecast on Tuesday, February, 1: exchange rate 1.1323 Dollars, maximum 1.1493, minimum 1.1153. Euro to Dollar forecast on Wednesday, February, 2: exchange rate 1.1387 Dollars, maximum 1.1558, minimum 1.1216.
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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