Weekly Forex Forecast: 23-27 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 continues to have a mixed week. The Euro is awaiting the Federal Reserve and what’s going to come out of that announcement as it continues to consolidate in the same range it has been in over the last couple of weeks.
Last week, our sentiment was bearish with a suggesting selling price EURUSD above1.10790 and buying it back at 1.0980 or below, closing the short position. The first opportunity came last Monday, 9/16, when the EURUSD opened at 1.09997, and closed at 1.1074. The intraday trading range from 1.10759 to 1.9002. The following day, EURUSD ranged from 1.10748 to 1.10365, closing at 1.10592, down 0.13% from the previous closing day. So far, there has not been an opportunity to sell it above our last week suggested selling price at or above 1.10790 or buying at or below 1.0980.
Based on the early price action and the current price at 1.1054, the direction of the EUR/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the 50% level at 1.1045 and the 61.8% level at 1.1073. We will keep the disciple, while waiting for an opportunity until the remaining of the week, ending on 9/20.
Next week (92/23-9/27), our bet will be on GBPUSD. With economic data on the lighter side, the market focus will be on Brexit chatter and the FOMC. For the Loonie, inflation figures will also influence. As Brexit talks persist, the BOE remains sidelined. And with the UK parliament prorogued, all attention is on UK PM Johnson’s talks with his EU counterparts. Current GBP to USD exchange rate equal to 1.2475 Dollars per 1 Pound. Today’s range: 1.2438-1.2500. Yesterday’s rate 1.2500. Change for today -0.0009 Dollars, -0.07%. Inverse rate: USD to GBP. As of 9/18.
GBPUSD: Retail trade data shows 60.4% of traders are net-long with the ratio of traders long to short at 1.53 to 1. In fact, traders have remained net-long since May 6 when GBPUSD traded near 1.3096; price has moved 4.6% lower since then. The percentage of traders net-long is now its lowest since Apr 17 when GBPUSD traded near 1.30389. The number of traders net-long is 13.3% lower than yesterday and 17.0% lower from last week, while the number of traders net-short is 14.9% higher than yesterday and 8.8% higher from last week.
In 1 week Pound to Dollar forecast on Wednesday, September, 25: exchange rate 1.2643 Dollars, maximum 1.2833, minimum 1.2453. GBP to USD forecast on Thursday, September, 26: exchange rate 1.2654 Dollars, maximum 1.2844, minimum 1.2464. Pound to Dollar forecast on Friday, September, 27: exchange rate 1.2726 Dollars, maximum 1.2917, minimum 1.2535. GBP to USD forecast on Monday, September, 30: exchange rate 1.2661 Dollars, maximum 1.2851, minimum 1.2471. Pound to Dollar forecast on Tuesday, October, 1: exchange rate 1.2752 Dollars, maximum 1.2943, minimum 1.2561.
With the Brexit talks ongoing, the BOE isn’t expected to move anytime soon; the BOE’s main rate is favored to stay at 0.75% through at least June 2020. But the moment clarity over Brexit begins to take shape, it seems highly likely that rate odds will evolve rapidly; the period of high volatility for the British Pound isn’t going to dissipate anytime soon.
Even tough, my long-term sentiment on the GBPUSD remains bearish, I am bullish for the week 9/23 to 9/27. My trade would be to go long on the GBPUSD. We would time to enter the long position GBPUSD, when the Scholastic/RSI is at or below 20%, ideally close to 0, indicating an intraday over-sold condition, while trying to buy it below 1.2452 and try to close the position above 1.2750 in order to lock in at least 2% gain on the trade. 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 short-term bullish formation from September 3rd, and confirmed by short covering, right after. A very important GBPUSD point is the resistance at 1.2453, which can become the new support for the GBPUSD and a short-term bullish sign. In case GBPUSD falls below 1.2321, we may be forming Head and shoulders formation, which will trigger a strong sell on GBPUSD..
US Dollar May Rise vs GBP if BoE Outlook on Brexit Spooks Markets GBPUSD, Brexit, BoE Rate Decision. Further GBP/USD may fall if BoE reinforces growing no-deal Brexit fearsUS Dollar and CHF may rise on risk-off tilt in European sessions GBP/USD aiming to retest multi-month descending resistance.
Remember to place 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.