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Weekly outlook for the most popular FX pair, the EURUSD. Analysis with the key events for the week ahead, and possible trading ideas.

EUR USD Forecast Nov. 22nd To Nov. 26th Messages in this topic - RSS

John Lee Rossi
John Lee Rossi
Administrator
Fundamental & Technical Research
Posts: 12


9 days ago
John Lee Rossi
John Lee Rossi
Administrator
Fundamental & Technical Research
Posts: 12
EUR USD Weekly Analysis Nov. 22nd to Nov. 26th

The EURUSD pair kept dropping, even further than expected, to reach the 1.13 level, and briefly even lower. The pair found strong resistance around this area, twice during the week, but strong pressure remains on the common currency, as Fed talks of upcoming rate hikes lead traders into the greenback.

The two shadows in the 4H chart lead to conclude that position traders consider any price below 1.13 to be strongly oversold and therefore a buying opportunity; however, it is not that simple for the Euro, as pressure continued throughout the week. The dragonfly from Wednesday followed by a strong bull candle on Thursday was a clear buy signal, but it was followed by serious selling at the end of the week, finally retracing a bit in the afternoon but again failing to move the price upwards, as it’s seen on the 4H shadow on Friday’s afternoon.

Such behaviour is rather uncommon, and is usually associated with surprises; Friday’s movement was probably caused by Lagarde’s comments on rate hikes “unlikely on 2022”. Even so, the Euro recovered some territory, leading to believe most market participants consider the pair to be already oversold.

EUR USD Forecast Nov. 22nd to Nov. 26th

So, what to expect? The pair is already oversold, and today’s news is most likely already priced in, so most likely some recovery is on the horizon. Uncertainty seems to remain among most participants, as seen at Friday’s afternoon when shadows on both directions were formed, indicating buyers want to keep buying and sellers still want to sell some more.

The balance is inclined in favour of the common currency, where bullish Euro news or no news at all should see some recovery, whereas only more USD bullish news would move the price further down, probably with lots of resistance as new buyers jump into the action and early sellers start to take profit. Still, the leg is not over until is over, and new buying signals are required to buy an eventual retracement. These signals were lacking during last week, we hope to see them early on the week ahead.

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