EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the EURUSD at or above 1.0440, setting a Stop Loss at 1.0715, and to go Long at or below 1.04158, setting a Stop Loss at 1.02.

This week, EURUSD price range was 1.0497 high, set today this past Monday, and 1.0292 low, set yesterday, Wednesday. So, Monday, we could have short the currency pair at 1.0495, covering it on an intraday trading at 1.0333, for 1.54% profit. Also Monday, we could have bought it at 1.04158, selling it on an intraday trading at 1.0495, for 0.76% profit. Tuesday, we could have bought it at 1.0321, selling it on an intraday trading at 1.0392, for 0.69% profit.

Wednesday, we could have short it at 1.04158, covering it on an intraday trading at 1.0427, for 0.11% profit. Also Wednesday, we could have bought it at 1.0294, selling it on an intraday trading at 1.0427, for 1.29% profit. Thursday, we could have short it at 1.044, covering it on an intraday trading at 1.0294, for 1.4% profit. Also Thursday, we could have bought it at 1.04158, selling it on an intraday trading at 1.0462, for an extra 0.44% ROI.

Fundamental Overview

The EURUSD pair trades well above the 1.0400 threshold, extending gains amid the broad US Dollar weakness. The pair hit an intraday high of 1.0463 early in the European session, easing modestly ahead of the release of critical United States data. Meanwhile, news that China is pivoting on its zero-Covid policy brought relief to financial markets, underpinning the EUR.

US Federal Reserve (Fed) Chair Jerome Powell triggered the US Dollar decline as he dropped the hawkish rhetoric on monetary policy, speaking at a private event. Among other things, Powell acknowledged that moderating the pace of rate hikes is the path to take and may come as soon as December, as progress towards “sufficiently restrictive” police has already been made.

Despite discouraging news for the EUR, the upbeat mood keeps the pair afloat. German Retail Sales fell by 2.8% MoM in October, much worse than anticipated. Additionally, S&P Global released the final versions of its November Manufacturing PMIs, which were downwardly revised. The German index was confirmed at 46.2, while the Euro Area one came down to 47.1 from the previously estimated 47.3.

Market players are now waiting for the US Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve’s preferred inflation gauge,  and the Institute of Supply Management (ISM) November´s Manufacturing PMI. Core PCE inflation, which excludes volatile food and energy prices, is expected to have risen by 0.3% MoM, while the annual reading is foreseen at 5%, easing from 5.1% in October. On the other hand, the ISM Manufacturing PMI is expected to have fallen into contraction territory, from 50.2 in October to 49.8.

Technical Analysis

EURUSD continues to trade in positive territory above 1.0400 as the US Dollar struggles to stage a rebound following FOMC Chairman Powell’s dovish remarks. Investors await October PCE inflation and November ISM Manufacturing PMI data from the US.

The EURUSD pair daily chart shows that the pair has advanced above its 200 Simple Moving Average (SMA), while the 20 SMA accelerated north below the longer one, reflecting increased buying interest. The Momentum indicator keeps heading lower within positive territory amid a weak daily opening, while the Relative Strength Index (RSI) consolidates at around 64. Overall, the risk is skewed to the upside, although the pair needs to clear its recent high at 1.0496 to confirm a sustainable rally.

The 4-hour chart favors another leg higher, although additional confirmations are needed. The pair is developing above all of its moving averages, with the 20 SMA picking up above bullish longer ones. Technical indicators, however, have lost their directional strength and stand pat within positive levels. Whether EURUSD can storm through 1.0500 will depend on the upcoming US first-tier figures.

Support levels are at 1.0400, 1.0360, and 1.0315.

Resistance levels are at 1.0465, 1.0500, and 1.0540.

For next week, as illustrated in the following 1 day chart, it shows a Classic bearish pattern, therefore, we expect retracement on the currency pair.  For next week, our technical analysis are suggesting to go Short on the EURUSD at or above 1.04056, setting a Stop Loss at 1.05, and to go Long at or below 1.0361, setting a Stop Loss at 1.01714.

As of 13:27 PM (GMT), the EURUSD was trading at 1.04735.

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, December, 2: exchange rate 1.0503 Dollars, maximum 1.0661, minimum 1.0345. EUR to USD forecast on Monday, December, 5: exchange rate 1.0492 Dollars, maximum 1.0649, minimum 1.0335. Euro to Dollar forecast on Tuesday, December, 6: exchange rate 1.0429 Dollars, maximum 1.0585, minimum 1.0273. EUR to USD forecast on Wednesday, December, 7: exchange rate 1.0422 Dollars, maximum 1.0578, minimum 1.0266.

 

In 1 week, Euro to Dollar forecast on Thursday, December, 8: exchange rate 1.0430 Dollars, maximum 1.0586, minimum 1.0274. EUR to USD forecast on Friday, December, 9: exchange rate 1.0528 Dollars, maximum 1.0686, minimum 1.0370. Euro to Dollar forecast on Monday, December, 12: exchange rate 1.0591 Dollars, maximum 1.0750, minimum 1.0432. EUR to USD forecast on Tuesday, December, 13: exchange rate 1.0515 Dollars, maximum 1.0673, minimum 1.0357. Euro to Dollar forecast on Wednesday, December, 14: exchange rate 1.0435 Dollars, maximum 1.0592, minimum 1.0278.

 

 

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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