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EURUSD Forecast and Technical Analysis Week July 8-12

EURUSD Forecast and Technical Analysis Week July 8-12

Fundamental Forecast

After Friday’s Non-Farm Payrolls Reports, USD Bulls regain the control. On the other side, the unemployment rate increased and most importantly wage growth held steady at 0.2% instead of rising to 0.3% like economists anticipated.

The dollar index broke the critical resistance. The reason for the Dollar’s rally despite the FED’s shift to a dovish bias is clear: The U.S. economy is stronger than its peers.

The upcoming week will bring more clarity about the Fed’s path. Powell is due to testify before the Congress, while the central bank will release the Minutes of its latest meeting. The US will also publish CPI data for June, with core inflation seen steady at 2.0%.

Dollar Bears approach is different. They believe that job report reduces the need for an immediate interest rate cut, but it doesn’t eliminate it. Nearly half of the members of the FOMC feel that easing is necessary this year and they won’t be swayed by a mixed jobs report and this week’s FOMC minutes should remind us of the extent of the central bank’s dovishness. Their concerns center around trade and inflation and while the US and China agreed to restart trade talks at G20, only time will tell whether the progress is real.

On the other side, the latest Germany Factory orders data proved that the slow down in the Eurozone economy is not temporary. The ECB is likely to take more easing actions including a rate cut.

The FED is now expected to cut rate just once this year by 25bps, as a “preventive” move. Concerns about a global economic slowdown are still driving the financial world, but the US continues being the strongest ring of the chain. As long as the market keeps believing that the Fed will pull the trigger just once this year, the dollar will likely keep rallying.

Now its in Powell’s hands. Whether the pair could break lower will depend solely on Powell. Will he maintain its confident outlook and down talk chances of aggressive rate cuts. I bet on it 95%.

Technical Overview

The pair ended the week at 1.12240.

Technical Indicators of the Daily Chart

RSI(14) 42.747 Sell
STOCH(9,6) 40.562 Sell
STOCHRSI(14) 0.000 Oversold
MACD(12,26) 0.002 Buy
ADX(14) 33.633 Sell
Williams %R -80.687 Oversold
CCI(14) -89.9675 Sell
ATR(14) 0.0060 Less Volatility
Highs/Lows(14) -0.0055 Sell
Ultimate Oscillator 34.803 Sell
ROC 0.071 Buy
Bull/Bear Power(13) -0.0107 Sell

Summary: Strong Bearish. RSI has downside rooms.

Moving Averages Daily Chart

Period Simple Exponential
MA5 1.1272
MA10 1.1323
MA20 1.1298
MA50 1.1238
MA100 1.1261
MA200 1.1333

 Summary: Strongly  Bearish. The Golden Cut is being printed.

The first MA Resistance: 1.1255 SMA 100 Daily

The first MA Support: Downside is empty.

Murrey Math Calculations ( Support / Pivot / Resistance for Monday )

Upside Levels:

1.12650 MM 1/8 Weak, Stall, Reverse   1.12910 MM 2/8 Major Pivot Resistance 1.13200 MM 3/8 Top of the Trading Range

Downside Levels:

1.12000 MM 0/8 Overshoot, 1.11697 MM -1/8 Extremely Overshoot,  1.11400 MM -2/8 Bottom


Ichimoku Readings

Senkou Span A: 1.11750

Senkou Span B: 1.12770

Tenkan-sen Kijun-sen: Bearish

Ichimoku Summary: The price is inside the cloud. Cloud’s support is 1.117500 and breakout of the support will accelerate the sell-off. Cloud’s resistance is 1.1.12770 and pullbacks towards 1.12770 can be used as a selling opportunity.

Harmonic and Chart Patterns:

Ascending channel has been broken.

Emerging Bullish Cypher Pattern H Chart: 1.11170


Oversold RSI H Chart and Bollinger Bandwidth/Percentage confirm a minor retracement toward  1.12600 – 1.12800. This potential pullback can be used as a selling opportunity. Technically, the near term targets of the pair are 1.12000, 1.11800. Closing below 1.11700 would send the pair 1.11500 and 1.11200 medium terms.

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DISCLAIMER: This is a technical analysis study, not advice or recommendation to invest money

EURUSD: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. Chartreaderpro does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility

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Ercu Kartas

B.U Economy Treasury Department Dealer Fund Manager Technical Analyst FX Trader

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