Forex Forecast: 28/12/2020 – 1/1/2021
EUR/USD Rates Week in Review
Last week, our technical indicators suggested to go long on the EURUSD, buying it at or below 1.2270, setting a stop loss at 1.21. So, this past Monday, we could have bought the currency pair at 1.2131 on a intraday trading, selling it at 1.2252, realizing 1% ROI. Tuesday, we could have bought it at 1.2153, selling it on a intraday trading at 1.2255, for a 0.84% gain. Wednesday, we could have bought it at 1.2152, selling it on a intraday trading at 1.2219, for 0.55% profit. Thursday, we could have bought it at 1.2185, selling it on a intraday trading at 1.2214, to lock in an extra 0.24% gain.
The USD failed to gain any respite from Wednesday’s mostly upbeat US macro releases. In fact, the headline Durable Goods Orders recorded a stronger-than-expected growth of 0.9% in November.
Meanwhile, core durable goods orders, which exclude transportation items, fell short of market expectations and increased by 1.1%. Separately, Initial Weekly Jobless Claims came in to show that the number of Americans filing for unemployment-related benefits fell to a three-week low of 803K during the week ended December 18. This was way below the 885K anticipated and the previous week’s upwardly revised 892K, albeit did little to impress the USD bulls.
However, relatively thin liquidity conditions ahead of the Christmas Holidays held investors from placing any aggressive bets. Apart from this, absent relevant market-moving economic releases, either from the Eurozone or the US, could further lead to a subdued/range-bound price action. That said, the incoming Brexit-related headlines and developments surrounding the coronavirus saga might continue to infuse some volatility in the global financial markets. This should influence the USD price dynamics and assist investors to grab some meaningful trading opportunities.
EURUSD eases from highs, clinging onto the 1.2200 level. The bulls ride the Brexit optimism wave, with a potential breakthrough likely to be announced at 1100 GMT. The optimism is the key driver behind the US dollar’s decline so far this Thursday.
From a technical perspective, the pair, so far, has managed to defend the weekly trend-line support, currently near the 1.2175-70 region. This is closely followed by the 1.2130-25 congestion zone, which coincides with Monday’s panic lows and should now act as a key pivotal point for short-term traders.
A convincing break below will be seen as the first sign of bullish exhaustion and turn the pair vulnerable. Some follow-through selling below the 1.2100 mark will add credence to the bearish breakdown and accelerate the fall further towards challenging the key 1.2000 psychological mark.
On the flip side, bulls might still need to wait for a sustained strength beyond YTD tops, around the 1.2270-75 region, before placing fresh bets. A subsequent move beyond the 1.2300 mark should pave the way for additional gains and push the pair towards the next major hurdle near the 1.2335-40 region. The momentum could further get extended and assist the pair to aim to reclaim the 1.2400 round-figure mark for the first time since April 2018.
For next week, as illustrated in the following 4-hour EURUSD chart, our technical analysis indicators suggest to go Long on the currency pair at or below 1.2190, setting a stop loss at 1.21.
As of 1:13 PM (GMT), the EURUSD was trading at 1.21924.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, December, 25: exchange rate 1.2228 Dollars, maximum 1.2411, minimum 1.2045. EUR to USD forecast on Monday, December, 28: exchange rate 1.2152 Dollars, maximum 1.2334, minimum 1.1970. Euro to Dollar forecast on Tuesday, December, 29: exchange rate 1.2146 Dollars, maximum 1.2328, minimum 1.1964. EUR to USD forecast on Wednesday, December, 30: exchange rate 1.2122 Dollars, maximum 1.2304, minimum 1.1940.
In 1 week, Euro to Dollar forecast on Thursday, December, 31: exchange rate 1.2196 Dollars, maximum 1.2379, minimum 1.2013. EUR to USD forecast on Friday, January, 1: exchange rate 1.2239 Dollars, maximum 1.2423, minimum 1.2055. Euro to Dollar forecast on Monday, January, 4: exchange rate 1.2247 Dollars, maximum 1.2431, minimum 1.2063. EUR to USD forecast on Tuesday, January, 5: exchange rate 1.2278 Dollars, maximum 1.2462, minimum 1.2094. Euro to Dollar forecast on Wednesday, January, 6: exchange rate 1.2250 Dollars, maximum 1.2434, minimum 1.2066.
WISHING ALL OF YOU A HAPPY HOLIDAY SEASON AND A BULLISH NEW YEAR!
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.