Last week, our technical indicators suggested going Short at or above 1.065, setting a Stop Loss at 1.07780, and going Long at or below 1.06, setting a Stop Loss at 1.05.
This week, EURUSD price range was 1.0930 high set today, Thursday, and 1.0732 low set this past Monday. So, Monday, we could have short currency pair at 1.0730, covering it on an intraday trading at 1.0633, for 0.9% profit. Tuesday, we could have short it at 1.07780, covering it on an intraday trading at 1.0706, for 0.67% profit. Wednesday, we could have short it at 1.07780, covering it on an intraday trading at 1.0761, for an extra 0.16% ROI.
EURUSD has extended its weekly rally during the Asian trading hours on Thursday and climbed above 1.0900. The near-term technical picture points to overbought conditions for the pair, suggesting that there could be a downward correction before it can resume its uptrend.
The dovish change witnessed in the US Federal Reserve’s language triggered a selloff in the US Dollar in the late American session on Wednesday and fueled EURUSD’s rally.
The Fed said that some “additional policy firming” may be appropriate instead of calling for “ongoing increases” in rates. Additionally, the revised Summary of Economic Projections revealed that the terminal rate projection stood unchanged at 5.1%.
During the press conference, FOMC Chairman Jerome Powell explained that tightening financial conditions would allow them to do less monetary tightening. Although Powell repeated that they were not forecasting a rate cut in 2023 and noted that they haven’t discussed any changes to the balance sheet reduction strategy, US T-bond yields fell sharply, reflecting the dovish expectations.
On the other hand, “If inflation develops as projected, further interest rate hikes have to follow in upcoming meetings,” European Central Bank policymaker Joachim Nagel said on Wednesday. “We have to tame inflation, and to do so, we have to be bold and decisive. In my view, our job is not done yet.”
The impact of the Silicon Valley Bank and Credit Suisse turmoil on financing conditions is likely to be felt more strongly in the US than in Europe. Hence, the ECB could be more willing to raise its policy rate to battle inflation than the Fed, highlighting a possible divergence in policy.
In the second half of the day, the weekly Initial Jobless Claims and February New Home Sales will be featured in the US economic docket. Eurostat will release the preliminary Consumer Confidence data for March as well. These data are unlikely to trigger a noticeable market reaction.
EUR/USD has retreated modestly and gone into a consolidation phase below 1.0900 following the rally witnessed in the Asian session. Ahead of the mid-tier data releases from the US, the US Dollar stages a technical correction and makes it difficult for the pair to stretch higher.
The Relative Strength Index (RSI) indicator on the four-hour chart holds above 70 and EURUSD is trading near the upper limit of the Bollinger Band, pointing to overbought conditions.
In case the pair stages a technical correction, 1.0850 (former resistance, static level) aligns as first support before, 1.0800 (psychological level, static level, mid-point of the Bollinger Band).
On the upside, additional gains toward 1.0930 (static level from January) and 1.1000 (psychological level, static level) could be seen once EUR/USD stabilizes above 1.0900 and confirms that level as support.
For next week, fundamentally the market is pricing Fed pivot. More of a dovish FOMC should lead to more of a weak Dollar, bullish Indices, and Bullish Cryptos. Technically, we have noticed the EURUSD was trading in a downtrend, managing to break it out successfully, hence, we are watching for a potential retrace of the trend around 1.071 Support and Resistance zone. Once the rejection is confirmed, our technical analysis is suggesting set 1.09 as a target as it is considered the next Major Resistance EURUSD will be facing.
Hence, our technical analysis are suggesting going Short at or above 1.08774, setting a Stop Loss at 1.10, and going Long at or below 1.085, setting a Stop Loss at 1.07111.
As of 11:58 AM (GMT), the EURUSD was trading at 1.08748.
EUR to USD forecast for tomorrow: Euro to US Dollar forecast on Friday, March, 24: exchange rate 1.095 US Dollars, maximum 1.111, minimum 1.079. EUR to USD forecast on Monday, March, 27: exchange rate 1.100 US Dollars, maximum 1.117, minimum 1.084. Euro to US Dollar forecast on Tuesday, March, 28: exchange rate 1.106 US Dollars, maximum 1.123, minimum 1.089. EUR to USD forecast on Wednesday, March, 29: exchange rate 1.112 US Dollars, maximum 1.129, minimum 1.095.
In 1 week, Euro to US Dollar forecast on Thursday, March, 30: exchange rate 1.115 US Dollars, maximum 1.132, minimum 1.098. EUR to USD forecast on Friday, March, 31: exchange rate 1.099 US Dollars, maximum 1.115, minimum 1.083. Euro to US Dollar forecast on Monday, April, 3: exchange rate 1.099 US Dollars, maximum 1.115, minimum 1.083. EUR to USD forecast on Tuesday, April, 4: exchange rate 1.108 US Dollars, maximum 1.125, minimum 1.091. Euro to US Dollar forecast on Wednesday, April, 5: exchange rate 1.114 US Dollars, maximum 1.131, minimum 1.097.