Forex Forecast: 26 – 30 July 2021

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the currency pair at or above 1.1778, setting a Stop loss at 1.19, and to go Long at or below 1.1740, setting a Stop loss at 1.1685.

This week, EURUSD price range was 1.1831 high, set today, Thursday, and 1.1752 low, set yesterday, Wednesday. Hence, we could have Short the currency pair this past Monday at 1.1823, buying it on an intraday trading at 1.1761 for 0.52% profit. Tuesday, we could short it 1.1803, buying it on an intraday trading at 1.1753, for 0.42% profit. Wednesday, we could short it 1.1803, buying it on an intraday trading at 1.1750, for 0.45% profit. Today, Thursday, we could have short it at 1.1829, buying it on an intraday trading at 1.1762, for an extra 0.57% profit.

Fundamental Overview

The EURUSD pair is down on a daily basis, despite a better market’s mood. The shared currency took note of the European Central Bank’s dovish stance. As widely anticipated, the ECB decided to leave the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively. Policymakers reaffirmed that the PEPP would continue to run significantly faster than at the beginning of the year.

On the so-long awaited new forward guidance, the Government Council noted that interest rates will remain at present or lower levels “until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realized progress in underlying inflation is sufficiently advanced.”

Meanwhile, the US published Initial Jobless Claims for the week ended July 16, which increased to 419K, missing the market’s expectations. The Chicago Fed National Activity Index printed at 0.09 in June, down from the previous 0.26. The country will publish Existing Home Sales for June later in the day.

 Technical Analysis

EURUSD has risen above 1.18 in response to the ECB’s dovish forward guidance. The bank wants to see inflation forecasts reach 2% before acting and may allow an overshoot. The dollar is edging lower with US yields.

 

The EURUSD pair peaked at 1.1813 right after the announcement and later fell to 1.1770. As President Christine Lagarde speaks, the pair seesaws between such a range, unable to firm up above 1.1800. The above  4-hour chart shows that the pair keeps developing inside a descendant channel,  offering a neutral-to-bearish stance.

The pair is stuck around a mildly bearish 20 SMA while technical indicators hover around their midlines. Further declines are likely on a break below the weekly low at 1.1751.

Support levels are set at 1.1750, 1.1720, and 1.1685. Resistance levels are at 1.1840, 1.1885, and 1.1920.

For next week, our technical indicators as shown in the following chart suggest to be watching out for a certain price reaction in the selling zone, and in case we see engulfing candles or long wick candles, then we should look for a short position entry at or above 1.1750, setting a stop loss at 1.1880, and entry a Long position at or below 1.17, setting a stop loss at 1.16.

 

 

As of 06:10 PM (GMT+1), the EURUSD was trading at 1.17617.

 

EUR to USD forecast for tomorrow:  Euro to Dollar forecast on Friday, July, 23: exchange rate 1.1812 Dollars, maximum 1.1989, minimum 1.1635. EUR to USD forecast on Monday, July, 26: exchange rate 1.1792 Dollars, maximum 1.1969, minimum 1.1615. Euro to Dollar forecast on Tuesday, July, 27: exchange rate 1.1790 Dollars, maximum 1.1967, minimum 1.1613. EUR to USD forecast on Wednesday, July, 28: exchange rate 1.1782 Dollars, maximum 1.1959, minimum 1.1605.

 

In 1 week, Euro to Dollar forecast on Thursday, July, 29: exchange rate 1.1757 Dollars, maximum 1.1933, minimum 1.1581. EUR to USD forecast on Friday, July, 30: exchange rate 1.1815 Dollars, maximum 1.1992, minimum 1.1638. Euro to Dollar forecast on Monday, August, 2: exchange rate 1.1731 Dollars, maximum 1.1907, minimum 1.1555. EUR to USD forecast on Tuesday, August, 3: exchange rate 1.1717 Dollars, maximum 1.1893, minimum 1.1541. Euro to Dollar forecast on Wednesday, August, 4: exchange rate 1.1747 Dollars, maximum 1.1923, minimum 1.1571.

 

 

 

 

 

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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