Happy New Year, everyone!

Last week, our technical indicators suggested going Short at or above 1.0617, setting a stop loss at 1.07737, and to go Long at or below 1.0406, setting a stop loss at 1.0290.

This week, EURUSD price range was 1.0708 high set this past Monday, and 1.0519 low, set  this past Tuesday. So, Monday, we could have Short the currency pair at 1.0706, covering it on an intraday trading at 1.0652, for 0.5% profit. Tuesday, we could have short it at 1.0682, covering it on an intraday trading at 1.0617, for 0.61% profit. Wednesday, we could have short it at 1.0634, covering it on an intraday trading at 1.0617, for an extra 0.16% ROI.

Fundamental Overview

The EURUSD pair seesaws around 1.0600 on Thursday, stable after a couple of volatile days. Financial markets’ return from the winter holiday season resulted in some wild price action across the FX board. So far, the US Dollar has outpaced its European rival, as EURUSD is 100 pips down from its Friday close. The Greenback, however, is weaker against commodity-linked rivals while also strong against the JPY.

The US Dollar found strength late Wednesday on hawkish US FOMC Meeting Minutes, as policymakers clearly expressed their concerns about inflation and believe the risks of price pressures are still high.

On the data front, Germany published the November Trade Balance, which posted a surplus of €10.8 billion, better than anticipated. The Euro Zone released the November Producer Price Index, which rose at an annual pace of 27.1%, retreating from a revised 30.5% gain in October. The encouraging news regarding European inflation came one day before the release of the EU Harmonized Index of Consumer Prices.

Across the pond, the US published December Challenger Job Cuts, down to 43.651K from 76.835K in the previous month. Upcoming next, the country will release the December ADP survey on private job creation, the November Trade Balance, and Initial Jobless Claims for the week ended December 23.

Technical Analysis

EURUSD holds steady above 1.0600 ahead of US data, managing to stage a modest rebound after dropping below 1.0600 earlier in the day. As investors refrain from making large bets ahead of the private sector employment data from the US, the pair’s trading action remains relatively subdued on Thursday.

The EURUSD pair hovers around a flat 20 Simple Moving Average (SMA) in the daily chart, while the 100 and 200 SMAs remain directionless well below the current level. At the same time, the Momentum indicator turned marginally higher but remains below its 100 line, while the Relative Strength Index (RSI) consolidates around 56, all of which reflect the absence of directional strength.

In the near term, and according to the above 4-hour chart, the pair is neutral-to-bearish. Technical indicators turned marginally lower, just below their midlines, favoring a downward extension without confirming it. The 20 SMA gains bearish traction below the 100 SMA, with the pair confined to a tight range between them. Finally, a bullish 200 SMA provides relevant support at around 1.0520.

Support levels are at 1.0560, 1.0520, and 1.0475.

Resistance levels are at 1.0640, 1.0695, and 1.0740.

For next week, and as illustrated in the following chart, EURUSD bull traders are starting to lose traction, as we predicted in the last article. Hence, our technical analysis are suggesting going Short at or above 1.0596, setting a stop loss at 1.0708, and to go Long at or below 1.05678, setting a stop loss at 1.0459.

As of 1:45 PM (GMT), the EURUSD was trading at 1.05700.

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, January, 6: exchange rate 1.0666 Dollars, maximum 1.0826, minimum 1.0506. EUR to USD forecast on Monday, January, 9: exchange rate 1.0544 Dollars, maximum 1.0702, minimum 1.0386. Euro to Dollar forecast on Tuesday, January, 10: exchange rate 1.0512 Dollars, maximum 1.0670, minimum 1.0354. EUR to USD forecast on Wednesday, January, 11: exchange rate 1.0557 Dollars, maximum 1.0715, minimum 1.0399.

In 1 week, Euro to Dollar forecast on Thursday, January, 12: exchange rate 1.0599 Dollars, maximum 1.0758, minimum 1.0440. EUR to USD forecast on Friday, January, 13: exchange rate 1.0577 Dollars, maximum 1.0736, minimum 1.0418. Euro to Dollar forecast on Monday, January, 16: exchange rate 1.0581 Dollars, maximum 1.0740, minimum 1.0422. EUR to USD forecast on Tuesday, January, 17: exchange rate 1.0590 Dollars, maximum 1.0749, minimum 1.0431. Euro to Dollar forecast on Wednesday, January, 18: exchange rate 1.0618 Dollars, maximum 1.0777, minimum 1.0459.

 Until next article, wishing all of you a 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.


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