Last week, our technical indicators suggested going Long at or below 1.0565, setting a Stop Loss at 1.04, and going Short at or above 1.0571, setting a Stop Loss at 1.085.

This week, EURUSD price range was 1.0592 high, set this past Monday, and 1.0448 low, set this past Tuesday. So, Monday, we could have bought the currency pair at 1.0477, selling it on an intraday trading at 1.0591, for 1.09% profit. Also, Monday, we could have short it at 1.0591, covering it on an intraday trading at 1.0477, for 1.08% profit. Tuesday, we could have bought it at 1.0449, selling it on an intraday trading at 1.0494, for 0.43% profit. Wednesday, we could have bought it at 1.0452, selling it on an intraday trading at 1.0532, for 0.77% profit. Thursday, we could have bought it at 1.0500, selling it on an intraday trading at 1.0529, for an extra 0.28% ROI.

 Fundamental Overview

The Euro recovered from its lowest level in almost a year against the US Dollar but is struggling to hold above 1.0500. Despite the rebound, it remains under pressure, with the trend favoring the Dollar.

The sell-off in government bonds is making investors nervous. The German 10-year yield rose to 3% for the first time since 2011, while the US Treasury yield peaked at 4.88% before pulling back. Higher yields coupled with slowing inflation mean that real yields are soaring.

Data from the Eurozone showed that the Producer Price Index (PPI) rose 0.6% in August, matching expectations, while the annual rate deepened into negative territory from -7.6% to -11.5%. Retail Sales in the Eurozone contracted by 1.2% in August, a reading worse than market forecasts of a 0.3% slide.

European Central Bank President (ECB) Christine Lagarde reiterated that interest rates would remain at sufficiently restrictive levels for as long as necessary. Markets do not anticipate another rate hike, and comments from ECB officials have become a non-event for the time being. On Thursday, Germany will report trade data.

The US Dollar Index pulled back on Wednesday, but the upward trend remains intact, and fundamental factors still favor the Dollar. The soft ADP report boosted the correction, and incoming employment data, including Jobless Claims on Thursday and Nonfarm Payrolls on Friday, will be critical.

Technical Analysis

EURUSD drops to 1.0500, as US Dollar regains poise.

The currency pair is dropping back toward 1.0500, fading the recovery in the European morning on Thursday. The souring mood seems to be lifting the demand for the US Dollar, capping the upside in the currency pair ahead of ECB-speak and US data.

Despite the rebound, the Euro is not out of the woods. The correction could extend without posing a significant threat to the dominant trend. On the daily chart, the Euro is trading well below the 20-day Simple Moving Average (SMA) and within a downtrend channel. A close above 1.0660 could change the short-term perspective to neutral.

On the 4-hour chart, there is some potential for an upside extension in EUR/USD, especially if it remains above the 20-SMA at 1.0505. The area around 1.0555 represents immediate resistance that could attract sellers, followed by an intermediate downtrend line at 1.0570. A decline below 1.0480 would expose recent lows at 1.0450. If this level is breached, the downside could find support at 1.0430, which is the lower boundary of the channel.

For next week, EURUSD is currently trading in a downward trend along a falling channel pattern. The pair has broken and closed above a previous monthly support level, which is now acting as resistance at the 1.0500 zone, as illustrated in the following chart.

Meanwhile, the pair is expected to retest the broken structure, leading to a potential bearish rebound towards the target that has been marked.

Hence, our technical analysis are suggesting going Long at or below 1.0499, setting a Stop Loss at 1.0355, and going Short at or above 1.0500, setting a Stop Loss at 1.06.

As of 10:33 AM (GMT+1), the EURUSD was trading at 1.05090.

EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, October, 6: exchange rate 1.055 US Dollars, maximum 1.071, minimum 1.039. EUR to USD forecast on Monday, October, 9: exchange rate 1.054 US Dollars, maximum 1.070, minimum 1.038. Euro to US Dollar forecast on Tuesday, October, 10: exchange rate 1.045 US Dollars, maximum 1.061, minimum 1.029. EUR to USD forecast on Wednesday, October, 11: exchange rate 1.045 US Dollars, maximum 1.061, minimum 1.029.

In 1 week, Euro to US Dollar forecast on Thursday, October, 12: exchange rate 1.051 US Dollars, maximum 1.067, minimum 1.035. EUR to USD forecast on Friday, October, 13: exchange rate 1.044 US Dollars, maximum 1.060, minimum 1.028. Euro to US Dollar forecast on Monday, October, 16: exchange rate 1.042 US Dollars, maximum 1.058, minimum 1.026. EUR to USD forecast on Tuesday, October, 17: exchange rate 1.037 US Dollars, maximum 1.053, minimum 1.021. Euro to US Dollar forecast on Wednesday, October, 18: exchange rate 1.035 US Dollars, maximum 1.051, minimum 1.019.

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.

 

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