Last week, our technical indicators suggested going Long at or below 1.08, setting a Stop Loss at 1.07, and going Short at or above 1.0816, setting a Stop Loss at 1.09.

This week, EURUSD price range was 1.0965 high, set this past Tuesday, and 1.0852 low set yesterday, Wednesday. So, having we followed our technical trading discipline, so far, we just had a trading opportunity this week, today. We could have short it at 1.09, covering it on an intraday trading at 1.0887, for 0.12% ROI.

 Fundamental Overview

Financial markets struggle to find directional momentum as the Thanksgiving Holiday kicks in. Japanese markets remained closed on Thursday, as will the United States (US) ones, while activity will be reduced on Friday. The EURUSD pair develops a handful of pips above the 1.0900 figure, recovering from a 1.0852 low posted on Wednesday.

Still, optimism reigns. Wall Street posted gains on Wednesday and is poised to close its best month in a year, as investors believe the tightening cycle is done and major central banks will move into a rate-cut cycle as soon as next year. Both the US Federal Reserve (Fed) and the European Central Bank (ECB) refrained from hiking interest rates for two consecutive meetings but held on to the mantra of “higher for longer.” Nevertheless, speculative interest bets against policymakers’ warnings, pricing in for the US a cut as soon as next May.

ECB member and Bundesbank President Joachim Nagel was on the wires early in the European session and said ECB’s policy is working, but added inflation isn’t yet tamed and may pick up in the upcoming months. His words did not impact EURUSD, as investors have heard the same from different officials in the last few months.

Data-wise, S&P Global published the November Purchaser Manager Indexes (PMIs) preliminary estimates for the Eurozone. The German Manufacturing PMI improved more than anticipated to 42.3 from 40.8 in October, a 6-month high. Services output was also better than expected, hitting a 2-month high of 48.7. The official report states that the economic downturn showed signs of easing, although it also noted prices saw faster increases, with inflationary pressure remaining centred on the service sector.

Meanwhile, the EU S&P Global PMIs in the same month also beat expectations, with manufacturing output at 43.8 and the services index printing at 48.2. The contraction rate was softer than anticipated, although the official report noted business activity continued to fall amid a further solid decline in new orders. The better figures pushed EUR/USD up to 1.0930, although the absence of volumes maintained it within familiar levels ahead of London’s close.

Technical Analysis

EURUSD continues to trade in positive territory above 1.0900 in the European session on Thursday, supported by the upbeat PMI data from Germany and the Eurozone, which showed a slowdown in the pace of contraction in private sector’s activity. The ECB will release the October meeting accounts later in the day.

The EURUSD pair met buyers around the 50% Fibonacci retracement of the 1.1275/1.0447 slump at 1.0858, while it trades below the 61.8% retracement at 1.0960, the immediate resistance level. From a technical point of view, chances of a steeper decline seem limited. The daily chart shows that the Relative Strength Index (RSI) indicator is picking up near overbought readings, while the Momentum indicator keeps retreating, although within positive levels. Buyers remain interested, but they lack strength amid limited activity. Finally, EURUSD continues developing above all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly north at a fresh one-month high, although still below the longer ones.

In the near term, and according to the 4-hour chart, the pair is neutral. Technical indicators hover around their midlines, reflecting the absence of directional interest. At the same time, EURUSD battles to overcome a directionless 20 SMA while the longer moving averages continue to advance far below the current level. The immediate resistance level is 1.0960, the 61.8% retracement of the aforementioned slide, with little chance of a clear breakout of the level in the upcoming sessions. Still, a break above the level should lead to a test of sellers’ willingness to defend the 1.1000 threshold.

Support levels are at 1.0860, 1.0825, and 1.0780.

Resistance levels are at 1.0925, 1.0960, and 1.1005.

For next week, EURUSD rose after ECB President Lagarde said it was too early to declare victory over inflation. The pair may attempt to reclaim the psychological 1.1000 level as technical indicators support the uptrend. The psychological level at 1.0900 acts as immediate support and is supported by the 7-day EMA at 1.0874. Wednesday European Central Bank (ECB) President Christine Lagarde’s hawkish comments overnight provided some support to the EURUSD currency pair.

Technical indicators for the EURUSD pair are supporting the current uptrend. A 14-day relative strength index (RSI) above 50 indicates bullish sentiment, suggesting the pair is gaining momentum.

Hence, and for next week, our technical analysis are suggesting going Long at or below 1.09465, setting a Stop Loss at 1.0801, and going Short at or above 1.09665, setting a Stop Loss at 1.1032.

As of 12:20 AM (GMT), the EURUSD was trading at 1.09069.

EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, November, 24: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070. EUR to USD forecast on Monday, November, 27: exchange rate 1.083 US Dollars, maximum 1.099, minimum 1.067. Euro to US Dollar forecast on Tuesday, November, 28: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070. EUR to USD forecast on Wednesday, November, 29: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076.

In 1 week, Euro to US Dollar forecast on Thursday, November, 30: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. EUR to USD forecast on Friday, December, 1: exchange rate 1.089 US Dollars, maximum 1.105, minimum 1.073. Euro to US Dollar forecast on Monday, December, 4: exchange rate 1.108 US Dollars, maximum 1.125, minimum 1.091. EUR to USD forecast on Tuesday, December, 5: exchange rate 1.110 US Dollars, maximum 1.127, minimum 1.093. Euro to US Dollar forecast on Wednesday, December, 6: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095.

 

Happy Thanksgiving, everyone!

 

 

 

 

 

 

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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