Weekly Forex Forecast: 16 – 20/12/2019
How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement
EUR Rates Week in Review
Last week, we stated the EURUSD seemed to be on a process of consolidation and during such process, it may be forming a Head and Shoulders pattern chart. Indeed, it looks like the left shoulder was just formed, and we may be in the process of completing the Head. Still and to be confident on the next trade to go short, one needs the confirmation of the completion of the right shoulder formation.
Still last week, our technical indicators suggested it to short the EURUSD between 1.11206 and 1.11035, closing the short position between 1.109808 and 1.1035. This Tuesday the opportunity arose, when Tuesday the EURUSD reached the low of 1.10701, enabling to lock in another gain on the currency pair of 0.45%.
The EURUSD pair held on to gains through the first half of the day, trading in a 20 pips’ range ahead of the ECB’s decision. Following the US Federal Reserve announcement, the dollar remained under pressure, although the shared currency was unable to rally past the 1.1145 high. As expected, the ECB left rates unchanged, remarking, as the Fed, absent inflationary pressures as the main reason behind the decision.
Meanwhile, the US released the November Producer Price Index, which remained flat in November, and rose by just 1.1% when compared to a year earlier, missing the market´s expectations. The core PPI was up by just 1.3% YoY. Initial jobless claims for the week ended December 6, jumped to 252K way above the market’s expectations, adding pressure on the dollar and pushing the EURUSD pair to fresh weekly highs.
The event of the day, however, is the ongoing Christine Lagarde speech and press conference, the first she presides. Her words were slightly encouraging, as, within the read statement, Lagarde said that there are some initial signs of stabilization in growth slowdown. Growth, however, has been revised slightly lower for this year and the next. He then added that there are some signs of life in inflation, reviewing it modestly up for 2020. The Q&A will come next and could trigger some interesting moves.
The EURUSD pair peaked at 1.1153 before retreating, overall retaining its bullish stance. In the 4-hour chart, the pair is comfortable above the 1.1110 price zone, where it has a Fibonacci support and intraday highs from these last few days. The pair is also developing above all of its moving averages, while technical indicators aim marginally higher near overbought readings. The main target from here is 1.1179, the high posted last October, while below the mentioned support, the slide can continue down to 1.1065. Support price levels on the currency pair are now at 1.1110, 1.1090, and 1.1065, while resistance is at 1.1180, 1.1220, and 1.1250.
For next week and as of today, Thursday at 5:16 PM (GMT+0), the EURUSD was trading at 1.1140. The precise price, our technical analysis is indicating to short it again and to close the short position between 1.1020 and 1.0990, where at this levels, the currency pair will attract buyers. Further, we need to pay attention to 1.1070 level, a key support price level because if we break it, there is a strong probability that the EURUSD will get between 1.1020 and 1.0990. On the other hand and on the upside, we have a strong resistance price level between 1.12 and 1.1170, so breaking it on the upside, the EUR USD could go higher to around 1.13-1.1250 price level.
EUR to USD forecast for tomorrow
Euro to Dollar forecast on Friday, December, 13: exchange rate 1.1176 Dollars, maximum 1.1344, minimum 1.1008. EUR to USD forecast on Monday, December, 16: exchange rate 1.1204 Dollars, maximum 1.1372, minimum 1.1036. Euro to Dollar forecast on Tuesday, December, 17: exchange rate 1.1206 Dollars, maximum 1.1374, minimum 1.1038. EUR to USD forecast on Wednesday, December, 18: exchange rate 1.1163 Dollars, maximum 1.1330, minimum 1.0996.
In 1 week Euro to Dollar forecast on Thursday, December, 19: exchange rate 1.1189 Dollars, maximum 1.1357, minimum 1.1021. EUR to USD forecast on Friday, December, 20: exchange rate 1.1187 Dollars, maximum 1.1355, minimum 1.1019. Euro to Dollar forecast on Monday, December, 23: exchange rate 1.1192 Dollars, maximum 1.1360, minimum 1.1024. EUR to USD forecast on Tuesday, December, 24: exchange rate 1.1253 Dollars, maximum 1.1422, minimum 1.1084. Euro to Dollar forecast on Wednesday, December, 25: exchange rate 1.1260 Dollars, maximum 1.1429, minimum 1.1091.
Again, remember to place stop losses, according to your risk tolerance as unexpected news coming to the market may significantly affect trends and prices. Until next article, happy Thanksgiving and 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. Further, 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 Tony Ferreira nor KeySoft. 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. Past investment results of any underlying managers should not be viewed as indicative of the future performance of the EUR/USD.