Forex Forecast: 27 – 31/07/2020

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 short the currency pair at 1.1414 and to cover it at around 1.1350. Long positions were set at 1.1313 for a target selling price of 1.1491. Throughout this week, the currency pair high and low, so far have been 1.1627 and 1.1401, respectively. Hence, no trading opportunities for Shorts. Once, our long trading target position was set at 1.1350, I am afraid we missed this week the long rally on the EURUSD, even though, we were correct predicting the currency pair trends for this week.


Fundamental Overview

The EURUSD pair is trading a few pips below the multi-month high set this week at 1.1601, with major pairs having spent the first half of the day within familiar levels. Investors are in wait-and-see mode, concerned about mounting tensions between the US and China, and the pandemic developments.


So far, nothing has been reported on the situation of the trade deal between Washington and Beijing, but this tense situation for sure will mean a deterioration in trade. About the coronavirus crisis, the US reported over 70,000 new cases in the previous 24 hours. Global new cases are 280,000 a record high.


German data failed to impress, although consumer sentiment improved, as the latest GFK Consumer Confidence Survey came in at -0.3 from -9.4 in the previous month. As for the US, the country published Initial Jobless Claims for the week ended July 17, which resulted at 1.41 million, worse than the 1.3M expected. Continuing Jobless Claims for the week ended July 10, improved to 16.197M. The numbers passed unnoticed.


Technical Analysis

EURUSD jumps above 1.16 amid EU fund tailwind, as the dollar weakness. As of 6:15 PM GMT +1, the EURUSD is trading above 1.1622, at the highest since late 2018. The euro continues benefiting from the EU agreement on a €750 billion recovery fund. The dollar is under pressure amid weak jobless claims figures, speculation about fiscal stimulus.



As the above chart illustrates, the EURUSD pair trading at daily highs of 1.1622, seems to be in the very short-term overbought, so, it should be correcting soon from overbought conditions, but without signs of a bearish extension coming up next. The 4-hour chart as it shows above, the 20 SMA maintains its firm bullish slope far above the larger ones, which also advance.


Technical indicators, in the meantime, barely retreated from overbought levels.  The corrective decline could continue on a break below 1.1545 for a 1.14 floor, a former high and the immediate support, while bulls will increase their bets on a break above 1.1620.


Support levels are set at 1.1545, 1.1500, and 1.1460, while Resistance levels are at  1.1590, 1.1620, and 1.1660.


For next week and as shown in the following chart, our technical indicators suggest to short the EURUSD at this level or 1.1622 for a covering target price between 1.15-1.14. For longs, our technical indicators are suggesting to go long between 1.15-1.14 for a selling target price of 1.20.



EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, July, 24: exchange rate 1.1665 Dollars, maximum 1.1840, minimum 1.1490. EUR to USD forecast on Monday, July, 27: exchange rate 1.1710 Dollars, maximum 1.1886, minimum 1.1534. Euro to Dollar forecast on Tuesday, July, 28: exchange rate 1.1802 Dollars, maximum 1.1979, minimum 1.1625. EUR to USD forecast on Wednesday, July, 29: exchange rate 1.1821 Dollars, maximum 1.1998, minimum 1.1644.



In 1 week, Euro to Dollar forecast on Thursday, July, 30: exchange rate 1.1867 Dollars, maximum 1.2045, minimum 1.1689. EUR to USD forecast on Friday, July, 31: exchange rate 1.1836 Dollars, maximum 1.2014, minimum 1.1658. Euro to Dollar forecast on Monday, August, 3: exchange rate 1.1846 Dollars, maximum 1.2024, minimum 1.1668. EUR to USD forecast on Tuesday, August, 4: exchange rate 1.1903 Dollars, maximum 1.2082, minimum 1.1724. Euro to Dollar forecast on Wednesday, August, 5: exchange rate 1.1956 Dollars, maximum 1.2135, minimum 1.1777.



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.

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