Weekly Forex Forecast: 16-20 September 2019
How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement
Euro Rates Week in Review
The Euro is having a mixed week, regaining ground against the low yielding and safe haven currencies while receding territory to the higher yielding and high beta currencies. EURUSD and EURCHF were the second and third best performing EUR-crosses last week, adding 0.43% and 0.13%, respectively. The US Dollar received no favors from the August US jobs report (NFP) which missed expectations at the end of the week.
With the US-China trade war simmering in a short-term state of truce, and G10 currencies’ central banks recalibrating their interest rate cut expectations, Asia-Pacific currencies were among the biggest movers on the week versus the Euro.
Most likely, the ECB will continue to push monetary policy into unknown territory as the Central bank struggles to achieve price stability. However, news report release on the Euro Zone Consumer Price Index (CPI) may push President Mario Draghi to trigger lower interest rates as the headline reading for inflation is expected to narrow to 1.0% from 1.1% per annum in July. Hence, the ECB may continue to establish a negative interest rate policy (NIRP) for the Main Refinance Rate.
With that said, EURUSD stands at risk of facing range-bound conditions over the remainder of the week as the pullback from the monthly-high (1.1250) fails to spur a test of the August-low (1.1027).
The new series of lower highs and lows brings the 1.1040 (61.8% expansion) region on the radar for EURUSD, with the next area of interest coming in around 1.0950 (100% expansion) to 1.0980 (78.6% retracement).
Euro to Dollar forecast on Friday, September, 13: exchange rate 1.0973 Dollars, maximum 1.1138, minimum 1.0808. EUR to USD forecast on Monday, September, 16: exchange rate 1.0974 Dollars, maximum 1.1139, minimum 1.0809. Euro to Dollar forecast on Tuesday, September, 17: exchange rate 1.0991 Dollars, maximum 1.1156, minimum 1.0826. EUR to USD forecast on Wednesday, September, 18: exchange rate 1.0985 Dollars, maximum 1.1150, minimum 1.0820.
In 1 week Euro to Dollar forecast on Thursday, September, 19: exchange rate 1.0987 Dollars, maximum 1.1152, minimum 1.0822. EUR to USD forecast on Friday, September, 20: exchange rate 1.1050 Dollars, maximum 1.1216, minimum 1.0884. Euro to Dollar forecast on Monday, September, 23: exchange rate 1.1054 Dollars, maximum 1.1220, minimum 1.0888. EUR to USD forecast on Tuesday, September, 24: exchange rate 1.1033 Dollars, maximum 1.1198, minimum 1.0868. Euro to Dollar forecast on Wednesday, September, 25: exchange rate 1.0965 Dollars, maximum 1.1129, minimum 1.0801.
As of Thursday, September 12:00 16:55:36 AM (GMT +1h), EURUSD was trading at 1.10790.
Hence, I am neutral for the remaining of the week on the EURUSD and bearish Monday, 9/16.
I would sell the EURUSD when the Scholastic/RSI is at above 80%, ideally close to 100, indicating an intraday over-bought condition, while trying to sell it above EURUSD 1.10790 or higher and try to close the position between 1.0980 and 1.0884. My three month target for the EURUSD is 1.0695. We will keep a close eye on the Relative Strength Index (RSI) as the oscillator comes off of trend line resistance, with the oscillator still tracking the bearish formation from June.
Keep in mind, the broader outlook for EURUSD is clouded with mixed signals as the exchange rate clears the May-low (1.1107) following the Federal Reserve rate cut in July, with the 1.1100 (78.6% expansion) handle no longer offering support. However, the lack of momentum to test the August-low (1.1027) may generate range-bound conditions amid the string of failed attempt to close above the Fibonacci overlap around 1.1190 (38.2% retracement) to 1.1220 (78.6% retracement).
Remember to put stop losses, according to your risk tolerance as unexpected news coming to the market, may significant affect trends and prices. Until next article, 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. 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 future performance of the EUR/USD.