Forex Forecast: 29/06 – 03/07/2020
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 go Short on the EURUSD at 1.1195, with a stop loss at 1.1254, and covering the short position at 1.11. On the other hand, if the currency pair breaks on the upside 1.12, a long position should be set at 1.1254, closing the long position at 1.14. Indeed, there were multiple opportunities throughout this week for Longs and Shorts to capitalize on the EURUSD volatility. Monday, we could have shorted the currency pair at 1.1270, covering it at 1.1165, realizing 0.93% profit. Tuesday, we could have gone long on the EURUSD at 1.1254, selling it intraday at 1.13550, gaining an extra 0.9%. Later in the trading session, we could have short it at 1.13550, closing it at 1.1233, gaining an extra 1.12%. Wednesday, long at 1.1254, selling it at 1.1327, gaining an extra 0.65%. In the same day, we could have shorted the currency pair at 1.1327, and closing it today at 1.1191, locking in an extra 1.20% gain.
The EURUSD pair remained under selling pressure throughout the first half of the day, piercing the 1.1200 figure on the back of risk-aversion and ahead of US data releases. Stocks came under selling pressure on Wednesday, with fears mounting after the US reported the largest one-day number of new coronavirus cases, spurring concerns about the economic health of the country. The longer the pandemic remains out of control, the longer will be the economic comeback.
European indexes pared their slumps and bounced a bit on headlines reporting that the ECB has introduced a new repo facility for central banks outside the Union, mean to address liquidity needs within the ongoing crisis.
US macroeconomic figures were pretty encouraging, as Durable Goods Orders came in at 15.8% in May, much better than anticipated, while Q1 GDP was confirmed at -5.0%. Initial Jobless Claims for the week ended June 19 were above expected, at 1.48M, while the Continuing Jobless Claims for the week ended June 12 improved to 19.552 M. The news had a limited impact on the dollar, which retains its strength against most of its major rivals.
EURUSD struggles with 1.1200 amid coronavirus concerns, upbeat US data.
EURUSD is battling 1.12, on the back foot. The surge in US coronavirus cases and IMF warnings are weighing on the market mood. US Durable Goods Orders surprised with a leap of 5.8% while jobless claims disappointed with 1.48 million. GDP was confirmed at -5%.
The EURUSD pair is trading at around 1.1200 ahead of the US opening, approaching a critical Fibonacci support at 1.1170, the 38.2% retracement of its latest daily advance. In the 4-hour chart, the pair is below its 20 and 100 SMA, which hover around the immediate Fibonacci resistance at 1.1270.
Technical indicators head firmly lower within negative levels, supporting a bearish extension, particularly if the pair breaks below the mentioned support.
Support levels are at 1.1170, 1.1125, and 1.1080. Resistance levels are at 1.1230, 1.1270, and 1.1310.
For next week, our technical indicators suggest to Short the EURUSD in the area of 1.1320 with a stop above 1.1390 and a profit in area 1,1260 and Buying in the area of 1.1180 with a stop below 1,1140 and a profit in the area of 1,1250. If it breaks on the downside 1.11, it suggests Buying in the area of 1,1090 with a stop below 1,1050 and a profit in the area of 1,1180.
EUR to USD forecast for tomorrow, Euro to Dollar forecast on Friday, June, 26: exchange rate 1.1208 Dollars, maximum 1.1376, minimum 1.1040. EUR to USD forecast on Monday, June, 29: exchange rate 1.1254 Dollars, maximum 1.1423, minimum 1.1085. Euro to Dollar forecast on Tuesday, June, 30: exchange rate 1.1339 Dollars, maximum 1.1509, minimum 1.1169. EUR to USD forecast on Wednesday, July, 1: exchange rate 1.1313 Dollars, maximum 1.1483, minimum 1.1143.
In 1 week, Euro to Dollar forecast on Thursday, July, 2: exchange rate 1.1271 Dollars, maximum 1.1440, minimum 1.1102. EUR to USD forecast on Friday, July, 3: exchange rate 1.1256 Dollars, maximum 1.1425, minimum 1.1087. Euro to Dollar forecast on Monday, July, 6: exchange rate 1.1195 Dollars, maximum 1.1363, minimum 1.1027. EUR to USD forecast on Tuesday, July, 7: exchange rate 1.1261 Dollars, maximum 1.1430, minimum 1.1092. Euro to Dollar forecast on Wednesday, July, 8: exchange rate 1.1224 Dollars, maximum 1.1392, minimum 1.1056.
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.