Forex Forecast: 5 – 9 July 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Long on the EURUSD at or below 1.19453, setting a stop loss at 1.1875, and to Short it at or above 1.20612, setting a stop loss at 1.21.
This week, EURUSD price range was 1.1946 high, set this past Monday, and 1.1838 low, set today, Thursday. Hence, we could have Bought the currency pair this past Monday at 1.1904, selling it on an intraday trading at 1.1944 for 0.34% profit. Tuesday, we could bought it at 1.1879, selling it on an intraday trading at 1.1930, for 0.43% profit. Wednesday, we could have bought it at 1.1847, selling it on an intraday trading at 1.1908, for 0.51%. Today, Thursday, we could have bought it at 1.1840, selling it on an intraday trading at 1.1882, for an extra 1.18% profit.
Has EURUSD bottomed out or is it only a correction? That is the question on traders’ minds, and the answer is probably the latter, merely a countertrend within the broader downside move.
While relatively upbeat euro-zone Manufacturing Purchasing Managers’ Indexes can justify a few pips to the upside for the euro, the dollar’s decline is more broad-based. However, it is not deep. It seems that investors are taking profits on greenback longs or, perhaps these are belated end-of-quarter flows.
The dollar still has substantial reasons to rise. The buck is backed by the Federal Reserve, which has recently taken a hawkish. That lean toward tightening monetary policy and printing fewer greenbacks is supported by upbeat data, such as weekly jobless claims, which hit a new low at 364,000.
A more significant economic release is due shortly, the ISM Manufacturing PMI. Markets will watch the headline figure as well as the employment component, which are set to be upbeat. That could give the dollar a fresh boost. The PMI serves as a hint toward Friday’s Nonfarm Payrolls report, one that carries elevated expectations. Are economists overestimating US job growth once again? Perhaps, and in that case, the greenback could suffer. Nevertheless, that is a story for Friday, not Thursday.
Back to the old continent, the EU launched its green passport on Thursday, yet summer holidays are at risk due to the rapid spread of the Delta variant of coronavirus. While over half of the old continent’s population received at least one vaccine dose, it is lagging behind its developed-world peers. All in all, EURUSD will likely fall before it recovers.
EURUSD advances toward 1.19 as the dollar pares gains.
EUR/USD has recaptured 1.1850 and is on a recovery path, as the dollar softens. US jobless claims beat estimates with 364K, yet failed to boost the greenback. The focus is on the ISM Manufacturing PMI.
Eurodollar has bounced off the lows, pushing the Relative Strength Index (RSI) on the four-hour chart away from the 30 levels, thus far from oversold conditions and allowing for more falls. Momentum remains to the downside and the currency pair trades under the 50, 100 and 200 simple moving averages.
Support awaits at 1.1855, which capped EURUSD before its most recent rise. It is followed by 1.1837, the new trough. Further down, 1.18 and 1.1760 await.
Some resistance is at the daily high of 1.1885, followed by 1.1910, which is where the 50 SMA hits the price. The next levels to watch are 1.1950 and 1.75 are next.
For next week, and as illustrated in the following chart, ascending channels are in the short-term on the rise and weak strength, when the market is falling, and when price breaks the channel on the support lower-side, then strong selling pressure on the currency pair is to be expected. Hence, our technical indicators are suggesting to go Short on the EURUSD at or above 1.1981, setting a stop loss at 1.2053, and to go Long on the currency pair at or below 1.1952, setting a stop loss at or below 1.18396.
As of 3:39 PM (GMT+1), the EURUSD was trading at 1.18586.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, July, 2: exchange rate 1.1817 Dollars, maximum 1.1994, minimum 1.1640. EUR to USD forecast on Monday, July, 5: exchange rate 1.1791 Dollars, maximum 1.1968, minimum 1.1614. Euro to Dollar forecast on Tuesday, July, 6: exchange rate 1.1778 Dollars, maximum 1.1955, minimum 1.1601. EUR to USD forecast on Wednesday, July, 7: exchange rate 1.1783 Dollars, maximum 1.1960, minimum 1.1606.
In 1 week, Euro to Dollar forecast on Thursday, July, 8: exchange rate 1.1788 Dollars, maximum 1.1965, minimum 1.1611. EUR to USD forecast on Friday, July, 9: exchange rate 1.1774 Dollars, maximum 1.1951, minimum 1.1597. Euro to Dollar forecast on Monday, July, 12: exchange rate 1.1798 Dollars, maximum 1.1975, minimum 1.1621. EUR to USD forecast on Tuesday, July, 13: exchange rate 1.1855 Dollars, maximum 1.2033, minimum 1.1677. Euro to Dollar forecast on Wednesday, July, 14: exchange rate 1.1810 Dollars, maximum 1.1987, minimum 1.1633.
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.