Weekly Forex Forecast: 18 – 22/11 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
Since last week, we have been waiting for a buying opportunity to get back long on the EURUSD at 1.10. Throughout the week, the EURUSD pair continued grinding lower, although at quite a slow pace.
This Tuesday, we finally reached 1.10, actually breaking 1.10 when it hit the low of 1.0995, but it quickly recovered to 1.10094, giving traders a short time opportunity to go long on the EURUSD. Indeed, we got some buying interest at this level as it was expected and as mentioned in the last week article. However, the pair has extended its decline to a fresh 1-month low of 1.0988 so far today, and stuck around it, ahead of Wall Street’s opening. Speculative interest is after safer assets amid renewed tensions between the US and China, correlated to farm products’ purchases, although panic has not arrived just yet. Data coming from Europe was generally encouraging, as the preliminary estimate of German Q3 Gross Domestic Product resulted at 0.1%, better than the flat growth predicted by analysts. The EU preliminary Q3 GDP met the market’s expectations by printing 0.2%, although in both cases the yearly readings were slightly better than forecasted. The US just released the October Producer Price Index, which came in better than anticipated, up by 0.4% MoM and by 1.1% YoY. The core readings were also upbeat, up by 0.3% and by 1.6% respectively. Also, initial Jobless Claims for the week ended November 8 came out but increased to 225K far above the expected 215K. A couple of Fed’s speakers, included Chief Powell, will offer speeches later today.
The EUR/USD pair is offering a neutral-to-bearish stance in the short-term while hovering around the 61.8% retracement of the October rally. In the 4-hour chart, the pair continues developing below all of its moving averages and with the 20 SMA extending its decline below the larger ones and capping advances. Technical indicators lack enough directional strength to confirm additional slides, but remain within negative territory, reflecting the lack of buying interest.
However, it seems evident to me that the market has created very clear information during the daily time-frame on the EURUSD on a trading range from 1.11600 to 1.10630. In an earlier article about the EURUSD, we stated that the pair actually formed a “head and shoulders” formation, instead of a cup of tea as we were hoping for.
Meaning, during such time shorts, would have been the most successful traders to profit from the downswing from the neckline price level or 1.10849 to 1.10630. So, the support area of 1.1063, it has actually now turned a resistance point. Therefore, this is actually a very strong support and resistance point. Isn’t that odd? Having the market broken this area to the downside if it is tested again, 1.1063 would become a strong resistance.
Having this information, for next week, we expect a push on the upside from 1.10 to 1.10812 as stated in the previous week article. So for next week, we will be waiting for a shift, both on structure and environment around 1.10078 as the above chart indicates, for a potential push to the upside price level of 1.10836. We will then, be shorting the EURUSD at 1.10836 to close the position at 1.09400 or hopefully at 1.09155.
EUR to USD forecast for tomorrow, and next week.
Dollar to Euro forecast on Friday, November, 15: exchange rate 0.9083 Euros, maximum 0.9221, minimum 0.8949. USD to EUR forecast on Monday, November, 18: exchange rate 0.9101 Euros, maximum 0.9240, minimum 0.8966. Dollar to Euro forecast on Tuesday, November, 19: exchange rate 0.9092 Euros, maximum 0.9230, minimum 0.8957. USD to EUR forecast on Wednesday, November, 20: exchange rate 0.9114 Euros, maximum 0.9253, minimum 0.8979.
In 1 week Dollar to Euro forecast on Thursday, November, 21: exchange rate 0.9131 Euros, maximum 0.9270, minimum 0.8996. USD to EUR forecast on Friday, November, 22: exchange rate 0.9136 Euros, maximum 0.9275, minimum 0.9001. Dollar to Euro forecast on Monday, November, 25: exchange rate 0.9177 Euros, maximum 0.9316, minimum 0.9042. USD to EUR forecast on Tuesday, November, 26: exchange rate 0.9209 Euros, maximum 0.9349, minimum 0.9073. Dollar to Euro forecast on Wednesday, November, 27: exchange rate 0.9198 Euros, maximum 0.9338, minimum 0.9062.
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 the 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 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.