Last week, our technical indicators suggested Long at or below 1.07096, setting a Stop Loss at 1.06, and going Short at or above 1.072541, setting a Stop Loss at 1.08.
This week, the EURUSD price range was 1.0736 high, set this past Tuesday, and 1.0649 low, set yesterday, Thursday. So, on Monday, we could have bought the currency pair at 1.0691, selling it on an intraday trading at 1.0733, for 0.39% profit. Tuesday, we could have bought it at 1.0665, selling it on an intraday trading at 1.0735, for 0.66% profit. Wednesday, we could have bought it at 1.0650, selling it on an intraday trading at 1.0732, for 0.77% profit. Thursday, we could have bought it at 1.0691, selling it on an intraday trading at 1.0727, for an extra 0.34% ROI.
Fundamental Overview
The US Dollar is in recovery mode on Thursday after edging sharply lower on Wednesday following the United States (US) Federal Reserve (Fed) monetary policy announcement. The Fed kept rates on hold and was mostly hawkish, as anticipated. However, the news were less concerning than expected, as Chairman Jerome Powell and co seemed not terribly concerned about the economic situation and maintained the door open for upcoming rate cuts.
The USD edged sharply lower with the news, pushing EURUSD towards the 1.0730 region. The Greenback managed to recover some ground during Asian trading hours and early in Europe, but retains its weak tone amid an optimistic market mood.
Data-wise, the Hamburg Commercial Bank (HCOB) and S&P Global released the final estimates of their April Manufacturing PMIs. European figures were encouraging, as the German index was confirmed at 42.5, while the Eurozone one hit 45.7, both above the previous estimates. In the US, the Goods and Services Trade Balance posted a deficit of $69.4 billion in March, worse than anticipated. Initial Jobless Claims declined to 208K in the week ending April 26, beating the 212K expected. Finally, Nonfarm Productivity in the first quarter of the year rose a modest 0.3%, while Unit Labor Cost in the same period was up 4.7%, higher than the 3.6% forecast.
Technical Analysis
EURUSD declines below 1.0700 as USD recovery continues.
The currency pair lost its traction and declined below 1.0700 after spending the first half of the day in a tight channel. The US Dollar extends its recovery following the strong Unit Labor Costs data and weighs on the pair ahead of Friday’s jobs report.
The USD remains on the back foot against most major rivals, with EURUSD hovering around 1.0700 ahead of Wall Street’s opening. The daily chart offers a neutral picture, although the risk skews to the downside. The pair is still battling to recover above a bearish 20 Simple Moving Average (SMA) to no avail. At the same time, the 100 and 200 SMAs gain downward traction far above the longer ones. Finally, the Momentum indicator aims higher within neutral levels, while the Relative Strength Index (RSI) indicator suggests limited buying interest, consolidating at around 45.
The above 4-hour chart shows bears are gaining strength. Technical indicators turned lower, although within neutral levels. At the same time, the pair is pressuring a flat 20 SMA while the 100 SMA heads south a few pips below the shorter one. A break through 1.0645 should anticipate a steeper decline, with eyes on a break below 1.0600, the year’s low.
Support levels are at 1.0645, 1.0600, and 1.0565.
Resistance levels are at 1.0740, 1.0785, and 1.0810.
For the next week, our technical analysis is suggesting going Long at or below 1.07250, setting a Stop Loss at 1.06, and going Short at or above 1.07251, setting a Stop Loss at 1.08.
As of 15:46 AM (GMT+1), the EURUSD was trading at 1.06829.
EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, May, 3: exchange rate 1.077 US Dollars, maximum 1.093, minimum 1.061. EUR to USD forecast on Monday, May, 6: exchange rate 1.072 US Dollars, maximum 1.088, minimum 1.056. Euro to US Dollar forecast on Tuesday, May, 7: exchange rate 1.075 US Dollars, maximum 1.091, minimum 1.059. EUR to USD forecast on Wednesday, May, 8: exchange rate 1.072 US Dollars, maximum 1.088, minimum 1.056.
In 1 week, Euro to US Dollar forecast on Thursday, May, 9: exchange rate 1.075 US Dollars, maximum 1.091, minimum 1.059. EUR to USD forecast on Friday, May, 10: exchange rate 1.074 US Dollars, maximum 1.090, minimum 1.058. Euro to US Dollar forecast on Monday, May, 13: exchange rate 1.079 US Dollars, maximum 1.095, minimum 1.063. EUR to USD forecast on Tuesday, May, 14: exchange rate 1.078 US Dollars, maximum 1.094, minimum 1.062. Euro to US Dollar forecast on Wednesday, May, 15: exchange rate 1.080 US Dollars, maximum 1.096, minimum 1.064.
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.
