Forex Forecast: 25 – 29 April 2022

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Long on the currency pair at or below 1.0982, setting a stop loss at 1.07258, and Short it above 1.0946, setting a stop loss at 1.10597.

This week, EURUSD price range was 1.0936 high set today, Thursday, and 1.0761 set this past Tuesday. So, Monday, we could have bought it at 1.0771, selling it on an intraday trading at 1.0820, for 0.45% profit. Tuesday, we could have bought it at 1.0763, selling it on an intraday trading at 1.0813, for 0.46% profit. Wednesday, we could have bought it at 1.0785, selling it on an intraday trading at 1.0866, for 0.75% profit. Today, we could have bought it at 1.0826, selling it on an intraday trading at 1.0934, for an extra 1% ROI.

 Fundamental Overview

EURUSD has regained its traction in the early European session on Thursday and advanced to its highest level in a week near 1.0900. The technical outlook suggests that the bullish bias stays intact in the near term and additional gains could be witnessed in case the pair clears the next significant resistance at 1.0920.

Improving market mood and falling US Treasury bond yields caused the greenback to suffer heavy losses against its rivals. The US Dollar Index, which tracks the dollar’s performance against a basket of six major currencies, is already down 1% since posting its highest daily close in nearly two years on Tuesday.

Meanwhile, hawkish comments from European Central Bank (ECB) officials provided an additional boost to the euro and fueled EURUSD’s rally.

ECB policymakers Martins Kazaks said on Wednesday that an ECB rate hike was possible as soon as July. Policymaker Pierre Wunsch told Bloomberg early Thursday that policy rates could turn positive this year and ECB Vice President Luis de Guindos noted that he was expecting the QE to end in July to pave the way for a rate hike.

Later in the session, Eurostat will release the March Harmonised Index of Consumer Prices (HICP) for the euro area. On a yearly basis, HICP is expected to arrive at 7.5% to match the flash estimate. More importantly, ECB President Christine Lagarde and FOMC Chairman Powell will appear at the IMF Springs Meetings. Unless Lagarde pushes back against the idea of hiking the policy rate in early-Q3, the euro is likely to preserve its strength.

On the other hand, Powell’s comments are unlikely to trigger a rally in US yields as the market pricing shows that investors are already expecting the Fed to opt for back-to-back 50 basis points rate increases in May and June.

Technical Analysis

EURUSD trades at its highest level in more than a week above 1.0900 on Thursday as the euro capitalizes on hawkish ECB commentary. The data from the EU showed that the annual HICP rose to 7.4% in March, compared to the flash estimate of 7.5%. Eyes on ECB President Lagarde’s appearance at the IMF event.

EURUSD is closing in on 1.0920 resistance, where the Fibonacci 38.2% retracement of the April downtrend and the 100-period SMA illustrated in the following four-hour chart is located.

With a four-hour close above that level, the pair could eye 1.0960 (200-period SMA, Fibonacci 50% retracement) and 1.1000 (psychological level) next.

On the downside, 1.0860 (Fibonacci 23.6% retracement) aligns as the first support before 1.0830 (50-period SMA). In case the pair drops below the latter, the next bearish target could be seen at 1.0800 (psychological level).

 

For next week, EURUSD just completed a bullish shark model, as shown below, in the 4-hour chart time frame. The Euro has been showing strong support for the USD for a long period of time. Also considering that the US is not at its best moment, this may be the right moment for a bullish correction from EUR. After all, both the EU and US economies have major problems!
According to our technical analysis, we would go Long on the currency pair at or below 1.09226, setting a stop loss at 1.0764, and Short it above 1.10218, setting a stop loss at 1.1111.

 

As of 11:55 PM (GMT), the EURUSD was trading at 1.09022.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, April, 22: exchange rate 1.0917 Dollars, maximum 1.1081, minimum 1.0753. EUR to USD forecast on Monday, April, 25: exchange rate 1.0926 Dollars, maximum 1.1090, minimum 1.0762. Euro to Dollar forecast on Tuesday, April, 26: exchange rate 1.0895 Dollars, maximum 1.1058, minimum 1.0732. EUR to USD forecast on Wednesday, April, 27: exchange rate 1.0874 Dollars, maximum 1.1037, minimum 1.0711.

 

In 1 week, Euro to Dollar forecast on Thursday, April, 28: exchange rate 1.0814 Dollars, maximum 1.0976, minimum 1.0652. EUR to USD forecast on Friday, April, 29: exchange rate 1.0877 Dollars, maximum 1.1040, minimum 1.0714. Euro to Dollar forecast on Monday, May, 2: exchange rate 1.0819 Dollars, maximum 1.0981, minimum 1.0657. EUR to USD forecast on Tuesday, May, 3: exchange rate 1.0833 Dollars, maximum 1.0995, minimum 1.0671. Euro to Dollar forecast on Wednesday, May, 4: exchange rate 1.0823 Dollars, maximum 1.0985, minimum 1.0661.

 

 

 

 

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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