Forex Forecast: 30 August – 3 September 2021

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the currency pair at or above 1.17105, setting a stop loss at 1.1750, and to go Long at or below 1.16588, setting a stop loss at 1.1650.

This week, EURUSD price range was 1.1775 high, set yesterday, Wednesday, and 1.1691 low, set this past Monday. So, we could have short the currency pair on Monday at 1.1749, covering it on an intraday trading at 1.1689, for 0.51% profit. Tuesday, we could have short it at 1.1764, covering it on an intraday trading at 1.1724, for 0.34% profit. Wednesday, we could have short it at 1.1773, covering it on an intraday trading at 1.1723, for 0.42% profit. Today, Thursday, we could have short it at 1.1773, covering it on an intraday trading at 1.1755, for an extra 0.15% ROI.

Fundamental Overview

Ongoing growth with more support from the central bank, markets seem to be content with the impact of the Delta COVID-19 variant on the economy and policymakers. For the dollar, it means additional falls. However, as this balance is a difficult act, and Europe has its own issues, the road to further EURUSD gains is bumpy.

One such road bump came from Wednesday’s release of Durable Goods Orders figures for July. Headline orders rose by 0.7% last month, better than estimated, giving the greenback a jolt to the upside. It also provided a profit-taking opportunity for those shorting the dollar.

However, the broader trend is of expectations that Federal Reserve Chair Jerome Powell would refrain from hinting at tapering down the bank’s bond-buying scheme. His speech on Friday, at the Jackson Hole Symposium, will be held virtually – a sign that the Fed is wary of the virus and its economic impact.

If the Fed scales down its own activity, the broader US economy is still struggling and needs more dollars printed. That is pushing the greenback down.

On the other hand, while the Delta variant is devastating hospitals in some southern states, with Florida standing out, there are signs of moderation. The 14-day change has slowed to 23% from triple-digit increases earlier this month. That implies the world’s largest economy is still set to continue growing at a satisfactory pace. In turn, demand for the dollar as a safe haven is easing.

An update on how the economy did in the second quarter is due out later on Thursday, and the economic calendar is pointing to an upgrade from 6.5% to 6.7% annualized expansion. That would serve as a reminder of America’s rapid recovery.

On the other side of the pond, the European Central Bank releases meeting minutes from its July meeting and it could shed light on the thinking in Frankfurt. On Wednesday, ECB Vice-President Luis de Guindos said that the bank could upgrade its economic forecasts. That helped the euro move higher.

On the other hand, German consumer and business climate figures both missed estimates, reflecting concerns about the recovery.

 Overall, the trend is to the upside, but not a one-way street.

 Technical Analysis

EURUSD slips toward 1.1750 on a more cautious market mood, as the safe-haven dollar gains some ground ahead of Fed Chair Powell’s highly anticipated Jackson Hole speech on Friday. Updated US GDP figures and the ECB’s meeting minutes are awaited.

 

Eurodollar has surpassed the 100 Simple Moving Average on the above four-hour chart and benefits from upside momentum while trading below the 200 SMA. Overall, bulls are in the lead but do not have full control.

Resistance awaits the daily high of 1.1775, followed by 1.1805, last week’s peak. Further above, 1.1825 and 1.1860 await EURUSD.

Support is at 1.1750, which capped the currency pair early this week, and then by 1.1725, which provided support in recent days. Further down, 1.1695 and 1.1660 are eyed.

For next week, recently, we have seen a significant drop on EURUSD and price after touching the strong support at 1.1660 (Weekly Low) stopped falling and started to retrace.

In the higher time frame (Daily) we can see the bullish candles with upside pressure.

In the following 4h chart, the descending trend line has been broken out to the upside and price has pulled back to it, but there is a resistance level at 1.1750 which price is struggling to fix above it but it hasn’t been successful yet.

On the other hand, the US dollar index ( DXY ) seems to be getting weaker in the short-run.

So, if price can close a bullish candle above 1.1750 and also breaks the last top at (1.1765 – 1.1770), we can expect a rise first to 1.18 and in the case of an upside breakout on this level, the next target would be 1.1850, otherwise, price will continue falling to 1.16 .

Hence, our technical indicators suggest to go Long on The EURUSD at or below 1.1770, setting a stop loss at 1.16656, and Short the currency pair at or above 1.18, setting a stop loss at 1.1850.

 

As of 10:47 AM (GMT+1), the EURUSD was trading at 1.17671.

 

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, August, 27: exchange rate 1.1793 Dollars, maximum 1.1970, minimum 1.1616. EUR to USD forecast on Monday, August, 30: exchange rate 1.1804 Dollars, maximum 1.1981, minimum 1.1627. Euro to Dollar forecast on Tuesday, August, 31: exchange rate 1.1849 Dollars, maximum 1.2027, minimum 1.1671. EUR to USD forecast on Wednesday, September, 1: exchange rate 1.1874 Dollars, maximum 1.2052, minimum 1.1696.

 

In 1 week, In 1 week Euro to Dollar forecast on Thursday, September, 2: exchange rate 1.1839 Dollars, maximum 1.2017, minimum 1.1661. EUR to USD forecast on Friday, September, 3: exchange rate 1.1836 Dollars, maximum 1.2014, minimum 1.1658. Euro to Dollar forecast on Monday, September, 6: exchange rate 1.1813 Dollars, maximum 1.1990, minimum 1.1636. EUR to USD forecast on Tuesday, September, 7: exchange rate 1.1813 Dollars, maximum 1.1990, minimum 1.1636. Euro to Dollar forecast on Wednesday, September, 8: exchange rate 1.1816 Dollars, maximum 1.1993, minimum 1.1639.

 

 

 

 

 

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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