Last week, our technical indicators suggested going Short at or above 1.1250, setting a Stop Loss at 1.15, and going Long below 1.1203, setting a Stop Loss at 1.10.

This week, EURUSD price range was 1.1150 high set today, Thursday, and 1.1020 low, set this past Tuesday. So, Monday, we could have bought the currency pair at 1.1058, selling it on an intraday trading at 1.1147, for 0.8% profit. Tuesday, we could have bought it at 1.1019, selling it on an intraday trading at 1.1086, for 0.6% profit. Wednesday, we could have bought it at 1.1036, selling it on an intraday trading at 1.1106, for 0.63% profit. Thursday, we could have bought it at 1.1076, selling it on an intraday trading at 1.1154, for an extra 0.7% ROI.

 Fundamental Overview

EURUSD gathered bullish momentum and climbed above 1.1100 during the European trading hours on Thursday. The near-term technical outlook highlights a bullish tilt but the European Central Bank’s (ECB) policy announcements and Gross Domestic Product (GDP) data from the US could drive the pair’s action in the second half of the day.

The US Federal Reserve (Fed) raised its policy rate by 25 basis points (bps) to the range of 5.25-5.5% as expected. During the press conference, Chairman Jerome Powell reiterate the data-dependent approach and refrained from confirming another rate hike this year. Powell also acknowledged that the policy was already restrictive.

Although the Fed has left the door open for additional tightening, markets seem to think that the Fed has reached the terminal rate unless there is a significant upside surprise to employment or inflation data.

The ECB is widely anticipated to raise key rate by 25 basis points (bps). Latest macroeconomic data releases from the Eurozone highlighted the slowdown in the economic activity.

In case ECB President Christine Lagarde adopts a cautious tone regarding future policy tightening and doesn’t commit to a September rate increase, EURUSD could lose its bullish momentum. On the other hand, the Euro could continue to gather strength if Lagarde downplays recession fears and repeats the need for a tight policy to bring inflation further down.

The US Bureau of Economic Analysis will release the first estimate of the second-quarter Gross Domestic Product (GDP) growth on Thursday. Markets expect an annualized GDP growth of 1.8% in Q2 following the 2% expansion recorded in the first quarter. A bigger-than-forecast GDP growth could provide a boost to USD and weigh on the pair.

Technical Analysis

EURUSD extends gains above 1.1100 ahead of ECB decision.

The currency pair is trading above 1.1100, extending gains in the European session. The pair remains firmer for the second consecutive day amid a broad-based US Dollar weakness and upbeat mood ahead of the ECB monetary policy decision.

 The Relative Strength Index on the 4-hour chart climbed above 50 and EUR/USD closed the last two 4-hour candle above the 100-period Simple Moving Average (SMA), reflecting a buildup of bullish momentum.

On the upside, 1.1150/60 (Fibonacci 23.6% retracement of the latest uptrend, 50-period SMA) aligns as first resistance area before 1.1200 (psychological level, static level) and 1.1250 (end-point of the uptrend).

Looking south, a 4-hour close below 1.1100 (Fibonacci 38.2% retracement, 100-period SMA) could attract sellers and trigger an extended decline toward 1.1050 (Fibonacci 50% retracement) and 1.1000 (psychological level, 200-period SMA).

For next week, EURUSD is at a strong support level and breaking the main Falling Wedge, too. On a bullish market, the currency pair may continue a bullish wave up to 150 to 200 Pips.

Our technical analysis are suggesting going Short at or above 1.12267, setting a Stop Loss at 1.12997, and going Long at or below 1.11, setting a Stop Loss at 1.09939.

As of 11:10 AM (GMT+1), the EURUSD was trading at 1.12063.

EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, July, 28: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095. EUR to USD forecast on Monday, July, 31: exchange rate 1.111 US Dollars, maximum 1.128, minimum 1.094. Euro to US Dollar forecast on Tuesday, August, 1: exchange rate 1.105 US Dollars, maximum 1.122, minimum 1.088. EUR to USD forecast on Wednesday, August, 2: exchange rate 1.104 US Dollars, maximum 1.121, minimum 1.087.

In 1 week, Euro to US Dollar forecast on Thursday, August, 3: exchange rate 1.098 US Dollars, maximum 1.114, minimum 1.082. EUR to USD forecast on Friday, August, 4: exchange rate 1.095 US Dollars, maximum 1.111, minimum 1.079. Euro to US Dollar forecast on Monday, August, 7: exchange rate 1.094 US Dollars, maximum 1.110, minimum 1.078. EUR to USD forecast on Tuesday, August, 8: exchange rate 1.095 US Dollars, maximum 1.111, minimum 1.079. Euro to US Dollar forecast on Wednesday, August, 9: exchange rate 1.095 US Dollars, maximum 1.111, minimum 1.079.

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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