EURUSD Rates Week in Review

Last week, our technical indicators suggested to go Short on the EURUSD at or above 1.01985, setting a Stop Loss at 1.03, and to go Long at or below 1.00949, setting a Stop Loss at 0.985.

This week, EURUSD price range was 1.0481 high, set this past Tuesday, and 1.0271 low, set this past Monday. So, Monday, have short the currency pair at 1.03, covering it on an intraday trading at 1.0273, for 0.26% profit. Tuesday, we could have short it at 1.03, covering it on an intraday trading at 1.0282, for an extra 0.17% ROI.

 2024 Fundamental Overview

EURUSD has been struggling to benefit from the selling pressure surrounding the US Dollar (USD) as investors assess the latest comments from European Central Bank (ECB) officials. The pair trades in a tight range at around 1.0400 and it needs to stabilize above that level to attract bulls.

European Central Bank’s (ECB) policymaker Pablo Hernandez de Cos said on Wednesday that the balance sheet reduction in the euro needs to be very gradual and predictable. On a similar note, ECB Vice President Luis de Guindos said the balance sheet reduction must be implemented with prudence and explained that they will start with passive quantitative tightening.

Furthermore, ECB Governing Council member Ignazio Visco argued that the case for implementing a less aggressive approach was gaining ground. It is too early to say whether these comments point to a less-aggressive policy tightening by the ECB but they seem to suggest that the policy divergence with the Federal Reserve (Fed) is unlikely to narrow, at least in the near term.

In the second half of the day, October Building Permits and Housing Starts will be featured in the US economic docket alongside the weekly Initial Jobless Claims. In case Building Permits in the US decline in a significant way following September’s 1.4% growth, the US Dollar is likely to come under renewed bearish pressure. The CME Group GedWatch Tool shows that markets are pricing in an 85% probability of a 50 basis points (bps) Fed rate hike in December, suggesting that is still some room for additional USD weakness.

Market participants will also pay close attention to comments from Fed officials but they are unlikely to push back against the market expectation for a smaller rate hike at the last policy meeting of the year.

Technical Analysis

EURUSD continues to push lower and trades deep in negative territory slightly above 1.0300. The negative shift witnessed in risk sentiment helps the US Dollar (USD) gather strength on Thursday and forces the pair to stay on the back foot.

The EURUSD pair daily chart shows that it retreated for a third consecutive day from around a bearish 200 SMA, currently providing dynamic resistance at around 1.0420. The 20 SMA, in the meantime, crossed above the 100 SMA in the 1.0030/40 area, suggesting mid-term buyers are still strong. Finally, technical indicators retreat modestly from overbought levels, falling short of suggesting an upcoming decline.

The risk skews to the downside in the near term, and according to the 4-hour chart. The pair has broken below a flat 20 SMA and extends its slide below it. The longer moving averages maintain their upward slopes but are over 200 pips below the current level. Technical indicators, in the meantime, continue to move south, the Momentum pressuring its 100 level, and the RSI currently at around 53. A steeper decline could be expected on a break below 1.0305.

Support levels are at 1.0305, 1.0260, and 1.0220.

Resistance levels are at 1.0375, 1.0420, and 1.0465.

For next week, as illustrated in the following 3-hour chart, we can see how the Euro did a retest of the resistance area and bounced back. Now the price on the currency pair is trading below the resistance area . Most likely the Euro may resume its downward trend, reaching the support level at 1.0125. Hence,our technical analysis are suggesting to go Short on the EURUSD at or above 1.03, setting a Stop Loss at 1.045, and to go Long at or below 1.02, setting a Stop Loss at 0.985.

As of 13:34 PM (GMT), the EURUSD was trading at 1.00335.

EUR to USD forecast for tomorrow: Euro to Dollar forecast on Friday, November, 18: exchange rate 1.0449 Dollars, maximum 1.0606, minimum 1.0292. EUR to USD forecast on Monday, November, 21: exchange rate 1.0473 Dollars, maximum 1.0630, minimum 1.0316. Euro to Dollar forecast on Tuesday, November, 22: exchange rate 1.0442 Dollars, maximum 1.0599, minimum 1.0285. EUR to USD forecast on Wednesday, November, 23: exchange rate 1.0600 Dollars, maximum 1.0759, minimum 1.0441.

In 1 week, Euro to Dollar forecast on Thursday, November, 24: exchange rate 1.0798 Dollars, maximum 1.0960, minimum 1.0636. EUR to USD forecast on Friday, November, 25: exchange rate 1.0730 Dollars, maximum 1.0891, minimum 1.0569. Euro to Dollar forecast on Monday, November, 28: exchange rate 1.0792 Dollars, maximum 1.0954, minimum 1.0630. EUR to USD forecast on Tuesday, November, 29: exchange rate 1.0856 Dollars, maximum 1.1019, minimum 1.0693. Euro to Dollar forecast on Wednesday, November, 30: exchange rate 1.1088 Dollars, maximum 1.1254, minimum 1.0922.