Forex Forecast: 8 – 12 February 2021

 

EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the currency pair at or above 1.21057, and to go Long at or below 1.19. Throughout this week, EURUSD price range has been trading between 1.2146 high set this past Monday, and 1.1976 low set today, Thursday. So, keeping our trading discipline this past Monday, we could have Short it at 1.2144, covering it today at 1.1978, realizing 1.37% ROI.

 Fundamental Overview

The EURUSD pair has fallen to 1.1982, a fresh 2021 low, and struggles to recover above the 1.2000 threshold. The dollar’s strength comes from progress in US President Joe Biden’s proposed $1.9 trillion stimulus package. Stocks are under pressure, but Treasury yields advance, providing support to the greenback. The yield on the benchmark 10-year Treasury note currently stands at 1.15%.

The EU published December Retail Sales which came in better than expected, rising by 2% in the MoM and 0.6% when compared to a year earlier. In the US, employment-related figures were mixed, as the Challenger Job Cuts report showed that US based companies announced layoffs of  79,552, in January from 77,030 in December.

Initial Jobless Claims decreased to 779K, beating expectations. Q4 Nonfarm Productivity contracted 4.8%, while the Unit Labor Cost in the same period rose 6.8% vs. 3.9% expected.

 Technical Analysis

EURUSD has tumbled below 1.20, hitting the lowest in two months. The US dollar is rising alongside Treasury yields, underpinned by fiscal stimulus hopes and robust US data. The Euro is struggling with vaccine concerns.

 

The EURUSD pair is trading just below 1.2000, maintaining its bearish tone in the near-term. In the above 4-hour chart, the 20 SMA has gained bearish momentum, now below 1.2060, a major Fibonacci resistance.

Technical indicators have lost their bearish momentum but remain near daily lows, with the RSI flirting with oversold readings. A strong support level comes at 1.1970, as the level represents the 50% retracement of the November/January rally. A steeper decline expected on a break below it.

Support levels are at 1.1970, 1.1925, and 1.1885, while Resistance levels are at 1.2025, 1.2060, and 1.2100.

 Fr next week, as illustrated in the following 4-hour EURUSD chart, our technical analysis indicators are suggesting to go Short on the currency pair at or above 1.2017 and to go Long at or below 1.1650.

 

As of 10:37 AM (GMT), the EURUSD was trading at 1.19728.

EUR to USD forecast for tomorrow:  Euro to Dollar forecast on Friday, February, 5: exchange rate 1.2031 Dollars, maximum 1.2211, minimum 1.1851. EUR to USD forecast on Monday, February, 8: exchange rate 1.2008 Dollars, maximum 1.2188, minimum 1.1828. Euro to Dollar forecast on Tuesday, February, 9: exchange rate 1.1942 Dollars, maximum 1.2121, minimum 1.1763. EUR to USD forecast on Wednesday, February, 10: exchange rate 1.1953 Dollars, maximum 1.2132, minimum 1.1774.

In 1 week, Euro to Dollar forecast on Thursday, February, 11: exchange rate 1.1964 Dollars, maximum 1.2143, minimum 1.1785. EUR to USD forecast on Friday, February, 12: exchange rate 1.1915 Dollars, maximum 1.2094, minimum 1.1736. Euro to Dollar forecast on Monday, February, 15: exchange rate 1.1934 Dollars, maximum 1.2113, minimum 1.1755. EUR to USD forecast on Tuesday, February, 16: exchange rate 1.1907 Dollars, maximum 1.2086, minimum 1.1728. Euro to Dollar forecast on Wednesday, February, 17: exchange rate 1.1904 Dollars, maximum 1.2083, minimum 1.1725.

 

 

 

 

 

 

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.

 

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