Forex Forecast: 01 – 05/06/2020
How to use the basic technical analysis concepts we have shared with you to predict the next week’s currency pair price movement
EURUSD Rates Week in Review
Last week, our technical indicators suggested initiating a short position between 1.09871 and 1.09239, closing the position between 1.084 and 1.08. The first short opportunity came this past Monday when we could have short it at 1.0915, and covering it in the same day at 1.0890, realizing a profit of 0.23%. Tuesday, there was another opportunity to short it at 1.09871, and closing the intraday position at 1.0891, locking in an extra 0.87% gain in the currency pair.
The EURUSD pair has spent most of this Thursday consolidating around 1.1000, waiting for US data. The market ignored mixed European data, as the EU Economic Sentiment Indicator came in at 67.5 in May, missing the market’s expectation of 70.3. Consumer Confidence in the same period printed at -18.8 as expected. Germany released the preliminary estimate of May’s inflation, with the annual CPI at 0.5%, as expected, down from 0.8% in April.
Meanwhile, US Treasury yields ticked higher and stocks advanced in Europe, as investors are willing to bet on economic reopenings.
US data came in mixed, as Durable Goods Orders fell by a new record of 17.2%, although better than the -19% forecast. The economic contraction in the country was revised lower to -5.0% for the first quarter of the year, according to the second estimate of the GDP.
Finally, 2.12 million people filed for unemployment support in the week ended May 22, worse than anticipated. The dollar hardly reacted with the news although US equities are marginally higher, suggesting the greenback will remain in the losing side.
As of 7:47 PM (GMT+1) EURUSD is trading at 1.10867, hitting new 8-week highs. US data was mixed with a ray of light coming from continuing claims and hopes about the EU Fund and reopenings trump Sino-American relations.
The EURUSD pair trades near its recent monthly high at 1.1035, bullish, according to intraday technical readings. The pair met buyers around 1.1000 during the European session, which somehow anticipates easing selling interest.
As illustrated in the 4-hour chart above, the pair is developing well above a bullish 20 SMA, while technical indicators resumed their advances within positive levels, in line with another leg higher. The pair needs now to run through 1.1040 to be able to extend its advance.
Support levels are now set at 1.0995, 1.0960, and 1.0925, while Resistance levels are at 1.1040, 1.1085, and 1.1120.
for next week, even though, most traders and investors are bullish on the EURUSD, as shown below, our technical indicators suggest a good opportunity to short it between 1.10906 and 1.10202, and close it at 1.09 or above it.
In 1 week, Euro to Dollar forecast on Thursday, June, 4: exchange rate 1.1041 Dollars, maximum 1.1207, minimum 1.0875. EUR to USD forecast on Friday, June, 5: exchange rate 1.1101 Dollars, maximum 1.1268, minimum 1.0934. Euro to Dollar forecast on Monday, June, 8: exchange rate 1.1107 Dollars, maximum 1.1274, minimum 1.0940. EUR to USD forecast on Tuesday, June, 9: exchange rate 1.1207 Dollars, maximum 1.1375, minimum 1.1039. Euro to Dollar forecast on Wednesday, June, 10: exchange rate 1.1217 Dollars, maximum 1.1385, minimum 1.1049.
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. 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 Pedro 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. Further, Pedro Ferreira is not long or short in the currency pair. Past investment results of any underlying managers should not be viewed as indicative of the future performance of the EUR/USD.