Forex Forecast: 7 – 11 February 2022
EURUSD Rates Week in Review
Last week, our technical indicators suggested to go Long on the currency pair at or below 1.14, setting a Stop Loss at 1.10, and to short it at or above 1.14, setting a Stop Loss at 1.1520.
This week, EURUSD price range was 1.1398 high, set today, Thursday, and 1.1138 low set this past Monday. So, Monday, we could have bought the currency pair at 1.1140, selling it on an intraday trading at 1.1247, for 0.96% profit. Tuesday, we could have bought it at 1.1223, selling it on an intraday trading at 1.1277, for 0.48% profit. Wednesday, we could have bought it at 1.1268, selling it on an intraday trading at 1.1329, for 0.54% profit. Today, Thursday, we could have bought it at 1.1267, selling it on an intraday trading at 1.1397, for an extra 1.15% ROI.
EURUSD has started to consolidate its weekly gains after reaching a new seven-day high of 1.1331 on Wednesday. The pair’s fate depends on the European Central Bank’s (ECB) tone on inflation and the rate outlook on Thursday.
Eurostat reported on Wednesday that the annual HICP registered a new record high of 5.1% in January. This print surpassed the market expectation of 4.4% by a wide margin and helped the shared currency continue to gather strength against the greenback.
The ECB is not expected to announce any changes to its policy settings following the February policy meeting. In case the bank changes its tone on inflation and acknowledges that it’s not transitory anymore, EUR/USD could gather bullish momentum.
In the meantime, Euro bulls hope for a hawkish ECB on hot EU inflation. On the other hand, the common currency could face renewed selling pressure if ECB President Christine Lagarde downplays inflation concerns and continues to push pack against rate hike bets.
Following Wednesday’s HICP data, euro-zone money markets price in 30 basis points of rate hikes by December 2022, according to Reuters.
In the second half of the day, the weekly Initial Jobless Claims, December Factory Orders and January ISM Services PMI data from the US will be looked upon for fresh impetus. Nevertheless, these data are likely to be ignored by market participants, who will be assessing Lagarde’s remarks.
EURUSD is trading at its highest level since mid-January near 1.1400 on Thursday as the shared currency capitalizes on ECB President Lagarde’s hawkish comments. Lagarde said inflation was seen staying high for longer than expected and didn’t push back against market pricing of rate hikes in 2022.
EURUSD faces stiff resistance at 1.1320, where the 100-period and 200-period SMAs on the four-hour chart are located. In case this level turns into support on a hawkish ECB tone, the next bullish targets are located at 1.1340 (Fibonacci 61.8% retracement of the latest downtrend) and 1.1380 (static level).
On the downside, additional losses toward 1.1260 (Fibonacci 38.2% retracement) and the 1.1210/1.1200 (Fibonacci 23.6% retracement, psychological level) area could be witnessed if 1.1300 (Fibonacci 50% retracement, psychological level) holds as resistance.
For next week, as illustrated in the following chart, the EURUSD price broke the support line and now, it seems to be retesting it. We should wait for the EURO pull back before entering a new Long position on the currency pair. When and if it happens, we will have a new good signal to sell. Hence, EURUSD may first fall towards the support level 1.1180 and may even decline further to the $1.10 price level. For next week, our technical analysis is suggesting to go Long on the currency pair at or below 1.1397, setting a Stop Loss at 1.10, and to short it at or above 1.1404, setting a Stop Loss at 1.16.
As of 2:55 PM (GMT), the EURUSD was trading at 1.13884.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, February, 4: exchange rate 1.1342 Dollars, maximum 1.1512, minimum 1.1172. EUR to USD forecast on Monday, February, 7: exchange rate 1.1385 Dollars, maximum 1.1556, minimum 1.1214. Euro to Dollar forecast on Tuesday, February, 8: exchange rate 1.1466 Dollars, maximum 1.1638, minimum 1.1294. EUR to USD forecast on Wednesday, February, 9: exchange rate 1.1470 Dollars, maximum 1.1642, minimum 1.1298.
In 1 week, Euro to Dollar forecast on Thursday, February, 10: exchange rate 1.1371 Dollars, maximum 1.1542, minimum 1.1200. EUR to USD forecast on Friday, February, 11: exchange rate 1.1309 Dollars, maximum 1.1479, minimum 1.1139. Euro to Dollar forecast on Monday, February, 14: exchange rate 1.1286 Dollars, maximum 1.1455, minimum 1.1117. EUR to USD forecast on Tuesday, February, 15: exchange rate 1.1261 Dollars, maximum 1.1430, minimum 1.1092. Euro to Dollar forecast on Wednesday, February, 16: exchange rate 1.1301 Dollars, maximum 1.1471, minimum 1.1131.
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.