Weekly Forex Forecast: 9 – 13/12/2019
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
Indeed, we had another nice call long on the EURUSD, when last Thursday, our technical analysis suggested to get back long on this currency pair between 1.0995 and 1.09894. Last Thursday, the EURUSD gave us another long entry opportunity at 1.09808 to lock in profits as I am writing this article at 1.11035, 5: 00 PM (GMT+0), getting a nice profit of 1.12% ROI. It was Thanksgiving week, so you all deserved it!
Dismal EU data didn’t help much the EUR/USD pair, but persistent dollar’s weakness keeps it afloat just below the 1.1100 figure. Speculative interest is a bit more optimistic about progress in the US-China trade relationship, but the cautious stance prevails.
Germany published October Factory Orders, which were down in the month by 0.4%, and by 5.5% when compared to a year earlier. In the EU, Retail Sales in the same month were down by 0.6%, and when compared to a year earlier, up by 1.4%, missing the market’s expectations. The Employment change in the Union in the third quarter of the year was up by 0.9% YoY, also missing the market’s expectations of 1.0%.
The US just released the October Trade Balance, which surprised to the upside as the deficit shrank to $ 47.2B. As for employment figures, US-based companies announced job cuts decreased by 11% in November, to 44,569 from 50,275 cuts announced in October. On a year on year comparison, US employers have cut 13.1% more jobs than in November 2018. Weekly unemployment claims were also upbeat, down to 203K in the week ended November 29.
US data just released was generally encouraging as unemployment claims decreased to 203K in the week ended November 20, while the trade deficit shrank to $47.2B in October. EU data disappointed, yet the pair holds on to weekly gains.
The EUR/USD pair continues trading at the upper end of its weekly range, neutral-to-bullish according to intraday readings. In the 4-hour chart, the 20 SMA is crossing above a flat 200 SMA, after already breaking through an also directionless 100 SMA, all of them below the current level. Technical indicators in the mentioned chart lack directional strength, with the Momentum just above its 100 level and the RSI around 62. The pair topped this week at 1.1115, while a relevant Fibonacci resistance comes at 1.1108. Once beyond these levels, the rally should continue toward the 1.1150 price zone. Support levels: 1.1065 1.1030 1.0985 and Resistance levels: 1.1120 1.1150 1.1190
The Euro rallied early during the trading session of this Thursday, as we continue to see a bit of bullish pressure recently. That being said, we are still in a very tight consolidation area and of course have a lot of resistance as shown from the previous session. The EURUSD is pressing the 1.11 level an area that tends to cause a bit of resistance. Beyond that, we also have the 200 day EMA above that could offer a selling opportunity as well. Because of this, I believe that it is only a matter of time before we can start fading the rally, as this market is most decidedly in a downtrend. That being said, it does look like we are starting to set up a larger consolidation area from the recent action that I have seen.
For next week, EURUSD seems to be on a process of consolidation, it may even get to 1.15, but my guess is to short the EURUSD between 1.11206 and 1.11035. In fact, heading to next week the EURUSD may be forming a Head and Shoulders chart. So, our technical trading suggests closing our next short position between 1.10350 and 1.09808.
EUR to USD forecast for tomorrow
Euro to Dollar forecast on Friday, December, 6: exchange rate 1.1081 Dollars, maximum 1.1247, minimum 1.0915. EUR to USD forecast on Monday, December, 9: exchange rate 1.1086 Dollars, maximum 1.1252, minimum 1.0920. Euro to Dollar forecast on Tuesday, December, 10: exchange rate 1.1146 Dollars, maximum 1.1313, minimum 1.0979. EUR to USD forecast on Wednesday, December, 11: exchange rate 1.1153 Dollars, maximum 1.1320, minimum 1.0986.
In 1 week Euro to Dollar forecast on Thursday, December, 12: exchange rate 1.1156 Dollars, maximum 1.1323, minimum 1.0989. EUR to USD forecast on Friday, December, 13: exchange rate 1.1141 Dollars, maximum 1.1308, minimum 1.0974. Euro to Dollar forecast on Monday, December, 16: exchange rate 1.1149 Dollars, maximum 1.1316, minimum 1.0982. EUR to USD forecast on Tuesday, December, 17: exchange rate 1.1144 Dollars, maximum 1.1311, minimum 1.0977. Euro to Dollar forecast on Wednesday, December, 18: exchange rate 1.1102 Dollars, maximum 1.1269, minimum 1.0935.
Again, 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, 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.