Forex Forecast: 7 – 11 June 2021
EURUSD Rates Week in Review
Last week, our technical indicators suggested to maintain Short positions on the EURUSD and continuing to go Short on the currency pair at or above 1.2170, setting a stop loss at 1.22763.
This week, EURUSD price range was 1.2255 high, set this past Tuesday, and 1.2154 low, set today, Thursday. Hence, on Monday, we could have Short the currency pair at 1.2231, buying it back on an intraday trading at 1.2185, for 0.38% profit. Tuesday, we could have short it at 1.2253, covering it on an intraday trading at 1.2213, for 0.72% profit. Wednesday, we could have short it at 1.2225, covering it on an intraday trading at 1.2135, for 0.49% and today, Thursday, we could have short it at 1.2212, covering it on an intraday trading at 1.2152, for an extra 0.49% profit.
The EURUSD pair held on to familiar levels a handful of pips below the 1.2200 figure through the first half of the day, retreating from a daily high at 1.2215 achieved during Asian trading hours. The main theme for the day is the US Federal Reserve, as the central bank announced on Wednesday that it will begin winding down part of its multiple programs set to support the economy throughout the pandemic.
“Portfolio sales will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning,” the Fed said. However, stocks traders take it badly, as European indexes are firmly down, dragging US futures alongside.
Markit published the final readings of its May Services PMIs, confirming the German index at 52.8 and revising that of the EU to 57.1. EURUSD accelerated its slump after the release of US employment-related data. The ADP survey on private jobs creation posted a whopping 978K in May, largely surpassing the 650K expected. Initial Jobless Claims for the week ended May 28 printed at 385K, better than the 395K expected and the lowest reading since the pandemic started.
On a down note, job cuts announced by US-based employers rose 7% in May to 24,586 from the 22,913 announced in April, according to the Challenger Job Cuts report. The country has yet to release the May ISM Services PMI, foreseen at 63 from 62.7 in the previous month. In this scenario, stocks are further down and the dollar up, as signs of economic growth put more pressure on the Fed to tighten its monetary policy.
EURUSD is being pressured on Fed taper talk, upbeat US ADP, accelerating its slump as the ADP survey showed that the private sector added 978K new jobs in May, much better than anticipated. Taper talks weigh on equities which in turn, fuel demand for the American currency. ISM Services PMI up next ahead of Nonfarm Payrolls.
The EURUSD pair fell to a fresh weekly low of 1.2158, holding nearby ahead of Wall Street’s opening. The above 4-hour chart shows that after meeting sellers around its 20 SMA, the pair accelerated below the 100 SMA, indicating resurgent selling interest.
Technical indicators head firmly south within negative levels, reaffirming the bearish case. The pair has room to extend its slide sub-1.2100 should the current sentiment persists.
Support levels are at 1.2160, 1.2120, and 1.2070.
Resistance levels are at 1.2200, 1.2245, and 1.2280.
For next week, and as illustrated in the following chart, our technical indicators persists on a short position in the EURUSD. Short positions on the currency pair should be set at or above 1.2175, setting a stop loss at 1.2250.
As of 2:50 PM (GMT+1), the EURUSD was trading at 1.2140, having a sharp decline as I am writing this article.
EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, June, 4: exchange rate 1.2215 Dollars, maximum 1.2398, minimum 1.2032. EUR to USD forecast on Monday, June, 7: exchange rate 1.2200 Dollars, maximum 1.2383, minimum 1.2017. Euro to Dollar forecast on Tuesday, June, 8: exchange rate 1.2238 Dollars, maximum 1.2422, minimum 1.2054. EUR to USD forecast on Wednesday, June, 9: exchange rate 1.2232 Dollars, maximum 1.2415, minimum 1.2049.
In 1 week, Euro to Dollar forecast on Thursday, June, 10: exchange rate 1.2240 Dollars, maximum 1.2424, minimum 1.2056. EUR to USD forecast on Friday, June, 11: exchange rate 1.2177 Dollars, maximum 1.2360, minimum 1.1994. Euro to Dollar forecast on Monday, June, 14: exchange rate 1.2212 Dollars, maximum 1.2395, minimum 1.2029. EUR to USD forecast on Tuesday, June, 15: exchange rate 1.2250 Dollars, maximum 1.2434, minimum 1.2066. Euro to Dollar forecast on Wednesday, June, 16: exchange rate 1.2198 Dollars, maximum 1.2381, minimum 1.2015.
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.