Weekly Forex Forecast: 2 – 6/12/2019
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
Another perfect call last week, when we suggested to sell the EURUSD from 1.10972 to 1.10816 and closing the position from 1.10 to 1.0940. Indeed, this Tuesday the currency pair hit the week low at 1.0992, getting a EURUSD ROI of 0.95%.
The major news affect the EURSD was the following headline: “The United States Trade Representative is in the process of completing its investigation, under Section 301 of the Trade Act of 1974, of France’s Digital Services Tax (DST) and intends to issue its report in that investigation on Monday, December 2, 2019. At that time, the United States Trade Representative also will announce any proposed action in the investigation.”
Following the news report, EURUSD dropped from its near-session highs at 1.1013 to fresh session lows at 1.0993. At the time this note was written, EUR/USD was back at 1.0999. Although the Thanksgiving trading period tends to be quieter, it’s important for traders to remember that something as simple as a tweet could upend a low volume market very easily.
Much like the reaction of the Chinese Yuan around negative US-China trade war headlines, the Euro took a dive below 1.1000 versus the US Dollar during the thinly-traded pre-Thanksgiving holiday session. There has been some speculation that a response to the French digital tax may only be the beginning of an expanded EU-US trade war. If so, more weakness for the Euro may be on the way.
The EURUSD pair continues trading around the 1.1000 figure, unmotivated for a fourth consecutive day. A holiday in the US is adding to the lack of volume, exacerbating the range. European data released this morning was mixed, as the November EU Economic Sentiment Indicator came in better-than-expected at 101.3. However, Consumer Confidence remained unchanged at -7.2. The preliminary estimate of German November inflation was worse than anticipated, down by 0.8% when harmonized with that of the EU.
Trade tensions between the US and China, after US President Trump decided to sign the Hong Kong human rights act, supporting the protest movement, spurred some risk aversion, leaning the scale toward the USD side. Nevertheless, it seems that trade talks continue between the US and China.
The EUR/USD pair is trading just above its 1.1000 level and it seems unlikely it will leave the range defined by Fibonacci levels, 1.0990/1.1030. The short-term picture is bearish, as technical indicators are retreating from their midlines in the 4-hour chart, although without strength. In the same chart, the pair tried to move above a bearish 20 SMA, but resumed its decline and is back below it.
Support levels: 1.0990 1.0950 1.0920 and Resistance levels: 1.1030 1.1065 1.1110.
As of this Thursday at 7.09 PM (GMT+0), the EURUSD last trade was at 1.1085, so we are remaining to watch the zone coloured green for a long entry opportunity on the EURUSD. position.
For next week, we are expecting a downside rejection at this level, but until the price has reached the lower 1.099’s, we will keep our discipline, suggesting an entry between 1.0995 and 1.09894, which will be a perfect entry long position.
EUR to USD forecast for tomorrow
Euro to Dollar forecast on Friday, November, 29: exchange rate 1.0995 Dollars, maximum 1.1160, minimum 1.0830. EUR to USD forecast on Monday, December, 2: exchange rate 1.1003 Dollars, maximum 1.1168, minimum 1.0838. Euro to Dollar forecast on Tuesday, December, 3: exchange rate 1.0998 Dollars, maximum 1.1163, minimum 1.0833. EUR to USD forecast on Wednesday, December, 4: exchange rate 1.0956 Dollars, maximum 1.1120, minimum 1.0792.
In 1 week Euro to Dollar forecast on Thursday, December, 5: exchange rate 1.0941 Dollars, maximum 1.1105, minimum 1.0777. EUR to USD forecast on Friday, December, 6: exchange rate 1.0935 Dollars, maximum 1.1099, minimum 1.0771. Euro to Dollar forecast on Monday, December, 9: exchange rate 1.0943 Dollars, maximum 1.1107, minimum 1.0779. EUR to USD forecast on Tuesday, December, 10: exchange rate 1.0962 Dollars, maximum 1.1126, minimum 1.0798. Euro to Dollar forecast on Wednesday, December, 11: exchange rate 1.0996 Dollars, maximum 1.1161, minimum 1.0831.
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 nore 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.