Forex Forecast: 3 – 7 April 2023
Last week, our technical indicators suggested going Short at or above 1.08774, setting a Stop Loss at 1.10, and going Long at or below 1.085, setting a Stop Loss at 1.07111.
This week, EURUSD price range was 1.0897 high set today, Thursday, and 1.0745 low set this past Monday. So, Monday, we could have bought the currency pair at 1.0747, selling it on an intraday trading at 1.0798, for 0.47% profit. Tuesday, we could have bought it at 1.0797, selling it on an intraday trading at 1.07847, for 0.11% profit. Wednesday, we could have bought it at 1.0819, selling it on an intraday trading at 1.0870 for 0.47% profit. Thursday, we could have short it at 1.0895, covering it on an intraday trading at 1.0826, for an extra 0.64% ROI.
EURUSD has extended its sideways grind above 1.0800 following Wednesday choppy action. The risk-positive market atmosphere continues to support the Euro but a soft inflation reading from Germany could trigger a downward correction in the pair.
Earlier in the day, the data from Spain showed that the Harmonized Index of Consumer Price (HICP), the European Central Bank’s (ECB) preferred gauge of inflation, declined to 3.1% on a yearly basis in March from 6% in February. With this print coming in much lower than the market consensus of 4%, the initial reaction dragged EUR/USD to 1.0820. Nevertheless, as the Euro Stoxx 50 Index opened more than 1% higher, the pair regained its traction. The annual HICP in Germany is forecast to fall to 7.3% in March from 8.7% in February. A reading below 7% could cause the Euro to lose interest while a higher-than-expected print should support the currency. Nevertheless, in case the risk rally stays intact in the second half of the day and Wall Street’s main indexes build on Wednesday strong gains, the US Dollar could have a hard time finding demand. In that scenario, EURUSD’s downside is likely to remain limited even if there is a negative reaction to German data.
The US economic docket will feature the weekly Initial Jobless Claims data alongside the US Bureau of Economic Analysis’ final revision to fourth-quarter Gross Domestic Product (GDP) growth, which is expected to match the previous estimate of 3.9%. It’s also worth noting that several FOMC policymakers will be speaking later in the day. Bloomberg report on Wednesday that FOMC Chairman Jerome Powell told the Republican Study Committee that they anticipate to raise the policy rate one more this yead. According to the CME Group FedWatch Tool, markets are currently pricing in a 60% probability that the Fed will leave its policy rate unchanged at the upcoming meeting. In case Fed officials deliver a similar message and voice their willingness to hike the rate one more time in May, the USD could gather bullish momentum and weigh heavily on EURUSD.
EURUSD closes in on 1.0900 after German inflation data. The currency pair continues to push higher toward 1.0900 in the early American session on Thursday. After the data from Germany showed that the annual HICP declined to 7.8% in March, compared to the market expectation of 7.5%, the Euro preserves its strength.
For next week, When the currency pair price broke support line, it started trades inside a big falling channel and declined to support area. Inside the channel, the Euro tried to rise, but failed, and after channel price started to rise. When it reached 1.0760, price fell to support area, making a strong upward movement towards 1.0930 price level. The Euro also broke 1.0780 level, and is now trading close to resistance line inside pennant. Possibly, price may bounce down of resistance line, before resuming its decline. Also, Euro may exit from pennant, trying to break support level and decline to $1.0705
Hence, our technical analysis are suggesting going Short at or above 1.085, setting a Stop Loss at 1.0955, and going Long at or below 1.075, setting a Stop Loss at 1.065.
As of 11:58 AM (GMT), the EURUSD was trading at 1.09177.
EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, March, 31: exchange rate 1.085 US Dollars, maximum 1.101, minimum 1.069. EUR to USD forecast on Monday, April, 3: exchange rate 1.089 US Dollars, maximum 1.105, minimum 1.073. Euro to US Dollar forecast on Tuesday, April, 4: exchange rate 1.093 US Dollars, maximum 1.109, minimum 1.077. EUR to USD forecast on Wednesday, April, 5: exchange rate 1.086 US Dollars, maximum 1.102, minimum 1.070.
In 1 week, Euro to US Dollar forecast on Thursday, April, 6: exchange rate 1.084 US Dollars, maximum 1.100, minimum 1.068. EUR to USD forecast on Friday, April, 7: exchange rate 1.093 US Dollars, maximum 1.109, minimum 1.077. Euro to US Dollar forecast on Monday, April, 10: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082. EUR to USD forecast on Tuesday, April, 11: exchange rate 1.104 US Dollars, maximum 1.121, minimum 1.087. Euro to US Dollar forecast on Wednesday, April, 12: exchange rate 1.110 US Dollars, maximum 1.127, minimum 1.093.
Until next article, wishing all of you wealthy trading!
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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