Forex Forecast: 4 – 8 October 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Long on the currency pair at or below 1.1720, setting a stop loss at 1.18045, and Short the EURUSD at above 1.18045, setting a Stop loss at 1.1860.
This week, EURUSD price range was 1.1728 high, set this past Monday, and 1.1568 low, set earlier today, Thursday. So, Monday, we could have bought the currency pair at 1.1686, selling it on an intraday trading at 1.1726, for 034% profit. Tuesday, we could have bought it at 1.1669, selling it at 1.1702, for 0.29% ROI. Wednesday, we could have bought it at 1.1591, selling it at 1.1689, for 0.85% profit. Today, Thursday, we could have bought it at 1.1570, selling it on an intraday trading at 1.1608, for an extra 0.33% ROI.
The EURUSD pair remains on the back-foot, accelerating its slide below the 1.1600 figure. So far, the pair has set a fresh 2021 low of 1.1567, as demand for the American currency in a tumultuous scenario persists. Stocks remain under pressure while government bond yields consolidate gains, with the yield on the 10-year US Treasury note holding above 1.50%.
European data failed to impress, adding pressure on the shared currency. German inflation remained path in September according to preliminary estimates, below the 0.1% expected. The unemployment change in the country resulted at -30K, also missing the market’s expectations.
US data was mixed, as Initial Jobless Claims were once again up, printing at 363K in the week ended September 24. The Gross Domestic Product was confirmed at 6.7% in Q2, slightly better than anticipated. Finally, core Personal Consumption Expenditures prices met expectations with 6.1%. US Federal Reserve Chair Jerome Powell will testify again with US Treasury Secretary Janet Yellen before Congress.
EURUSD is trading below 1.16, marginally above the new 2021 lows, as US. Fed Chair Powell testifies as upcoming tapering underpins the dollar. The US is set to avert a government shutdown but the debt ceiling issue remains open. Final GDP came out at 6.7%, a small beat.
As the above chart illustrates, the EURUSD pair trades in the 1.1580 price zone, oversold but bearish in the near term. The 4-hour chart shows that technical indicators have resumed their declines and keep heading south despite being at extreme levels, while the 20 SMA further fell below the longer ones and above the current level. Further declines could be expected on a break below 1.1560, although chances of a corrective advance increased.
Support levels are at: 1.1560, 1.1520, and 1.1485. Resistance levels are at 1.1640, 1.1680, and 1.1725.
For next week, and as illustrated in the following chart, our technical analysis focus on Price reaction, below our pivot level at 1.17033. Price can potentially take support at 1.6236, which is in line with horizontal overlap support. Alternatively, price may rise up to the resistance level at 1.17554. This is further supported by how price is holding below the EMA . So, we would go Long on the currency pair at or below 1.1650, setting a Stop Loss at 1.17, and Short it at or above 1.1750, setting a Stop Loss at 1.1875.
As of 4:30 PM (GMT+1), the EURUSD was trading at 1.15871.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, October, 1: exchange rate 1.1505 Dollars, maximum 1.1678, minimum 1.1332. EUR to USD forecast on Monday, October, 4: exchange rate 1.1505 Dollars, maximum 1.1678, minimum 1.1332. Euro to Dollar forecast on Tuesday, October, 5: exchange rate 1.1505 Dollars, maximum 1.1678, minimum 1.1332. EUR to USD forecast on Wednesday, October, 6: exchange rate 1.1458 Dollars, maximum 1.1630, minimum 1.1286.
In 1 week, Euro to Dollar forecast on Thursday, October, 7: exchange rate 1.1505 Dollars, maximum 1.1678, minimum 1.1332. EUR to USD forecast on Friday, October, 8: exchange rate 1.1472 Dollars, maximum 1.1644, minimum 1.1300. Euro to Dollar forecast on Monday, October, 11: exchange rate 1.1466 Dollars, maximum 1.1638, minimum 1.1294. EUR to USD forecast on Tuesday, October, 12: exchange rate 1.1470 Dollars, maximum 1.1642, minimum 1.1298. Euro to Dollar forecast on Wednesday, October, 13: exchange rate 1.1427 Dollars, maximum 1.1598, minimum 1.1256.
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.