Forex Forecast: 6 – 10 December 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Long at or below 1.1250, setting a Stop Loss at 1.11917, and to Short the currency pair at or above 1.13176, setting a Stop Loss at 1.1360.
This week, EURUSD price range was 1.1384 high, set this past Tuesday, and 1.1236 low, set also on Tuesday. So, this past Tuesday, we had our first trading opportunity, as we could have bought the currency pair at 1.1238, selling it on an intraday trading at 1.1382, for 1.28% profit. Tuesday, we could have also Short the currency pair at 1.1382, covering it on an intraday trading at 1.1238, for 1.27% profit. Wednesday we could have Short the currency pair at 1.1357, covering it on an intraday trading at 1.1305, for 0.46% profit. Today, Thursday, we could have Short the currency pair at 1.1346, covering it on an intraday trading at 1.1309, for 0.33% extra ROI.
The EURUSD pair keeps trading within familiar levels above the 1.1300 figure, modestly up on Thursday. The market is in wait-and-see mode, as uncertainty arose following the announcement of a new COVID-19 variant and comments from US Federal Reserve chair Jerome Powell, who hinted at speeding up tapering amid persistently high inflation.
Meanwhile, stocks trade with a sour tone, while US Treasury yields are under mild pressure, weighing on the greenback at the time being.
On the data front, the EU published the October Producer Price Index, which skyrocketed to 21.9% YoY, after rising by 5.4% in the month. The Union’s unemployment rate contracted to 7.3% in the same month, as expected. The US published Initial Jobless Claims for the week ended November 19, which contracted to 222K much better than anticipated, while the November Challenger Job Cuts printed at 14,875K in November.
EURUSD trades in the upper half of its daily range around 1.1330 in the early American session on Thursday. The data from the US showed that the weekly Initial Jobless Claims increased to 222K from 194K but market participants paid no attention to this reading ahead of Friday’s November jobs report.
The EURUSD pair is technically neutral, with the downside limited in the near term by a Fibonacci support level at 1.1305, the 23.6% retracement of the November slide. The above 4-hour chart shows that the 20 SMA keeps advancing, now a handful of pips below a bearish 100 SMA, while the pair hovers in between. Meanwhile, technical indicators have lost directional strength but hold within positive levels. Bulls may have a chance if the pair overcomes the next Fibonacci resistance level at 1.1380.
Support levels are at 1.1305, 1.1260, and1.1210.
Resistance levels are at 1.1380, 1.1425, and 1.1470.
For next week and after the impulse drop in the beginning of this week, EURUSD is currently trading sideways. In situations like this, it’s better to wait and look for trades once everything is clear. Yesterday the pair held above 1.1300 and that showed us this move doesn’t have enough strength to continue lower. That’s why, today we’re looking for a setup where price will continue higher and possibly break above 1,1380 and reach 1,1440. This scenario is still not confirmed, but once a bottom is formed, we will then expect price reaching 1,1440. In order to enter on the next trade, we want to see a reversal candle and a good risk to reward ratio.
According to our technical analysis illustrated in the following chart, it is recommending to go Long at or below 1.13136, setting a Stop Loss at 1.12348, and to Short the currency pair at or above 1.13146, setting a Stop Loss at 1.13814.
As of 4:21 PM (GMT), the EURUSD was trading at 1.13075.
In 1 week, Euro to Dollar forecast on Thursday, December, 9: exchange rate 1.1438 Dollars, maximum 1.1610, minimum 1.1266. EUR to USD forecast on Friday, December, 10: exchange rate 1.1389 Dollars, maximum 1.1560, minimum 1.1218. Euro to Dollar forecast on Monday, December, 13: exchange rate 1.1403 Dollars, maximum 1.1574, minimum 1.1232. EUR to USD forecast on Tuesday, December, 14: exchange rate 1.1345 Dollars, maximum 1.1515, minimum 1.1175. Euro to Dollar forecast on Wednesday, December, 15: exchange rate 1.1269 Dollars, maximum 1.1438, minimum 1.1100.
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.