Euro to Dollar Exchange Rate Forecast Update: The Levels the Pro’s are Targeting

Trade in the euro exchange rate complex over recent days has therefore been undestandably tricky to decode.

The EUR to USD pair continues to drift lower, yet it still retains the majority of the gains registered following the ECB meetingfrom last week.

The performance is to be expected in the context of how investor have taken bets that the ECB has spent its ammunition, but, as we have argued, there is likely to be weakness ahead.

The euro is now cheaper than ever to borrow ensuring it is being sold by investors who are buying foreign currencies to fund higher-yielding investments.

But, how far can the declines extend, and what are realistic targets for real money and traders alike to target?

We bring you a compilation of the latest views concerning the euro’s outlook from those institutional analysts and brokerages we follow.

Euro / Dollar Lower

Richard Perry at Hantec Markets:

“The bulls continue to be tested as the euro puts pressure once more on the 50 pip pivot band $1.1050/$1.1100. Intraday dips below $1.1100 in the past couple of sessions have been repelled into the close but the pressure is mounting.

“Momentum indicators are also beginning to roll over with the Stochastics now threatening to cross lower. I still see this as the chart trying to settle in the wake of the huge volatility of last Thursday (ECB day) but an intraday move below $1.1050 or a close below $1.1100 would suggest continued retracement.”

Jeremy Stretch at CIBC:

“The single currency continues to head back towards the 200-day MAV versus the USD at 1.1043. With the data calendar remaining relatively empty and little ECB rhetoric expected in the near term we would argue that implied rate spreads moving back towards the US points towards EUR USD continuing to grind lower.”

Yann Qelenn at Swissquote:

“In the longer term, the technical structure favours a bearish bias as long as resistance holds.

“Key resistance is located region at 1.1453 (range high) and 1.1640 (11/11/2005 low) is likely to cap any price appreciation. The current technical deteriorations favours a gradual decline towards the support at 1.0504 (21/03/2003 low).”

The CitiFX Flows team points to hedge funds & real money accounts selling EUR post-ECB and the medium to longer term outlook continues to point to a decline
while any short term gains are seen capped at 1.1350–1.14.

Euro / Dollar Higher

The CitiFX Techncials team point to EURUSD having staged a weekly close above the 1.1045/60 area and the short term technical picture still looks constructive with next resistance seen at 1.1210 (overnight high) followed by 1.1318 (daily resistance trend line).

Ralf Umlauf at Helaba Bank notes:

"From a technical perspective, the intact buy signals from the MACD and Stochastic are worth noting. Moreover, there are no signs of an overbought market situation despite the upturn in price movements last week.

"However, the euro's failure to firm above the 61.8% retracement (1.1166), leading to a test of the 50% level (1.1101), suggests caution. Further resistances are seen at 1.1219 and 1.1250. Supports are found in the region of the 200-day moving average (1.1044) and around 1.10. Our favoured trading range: 1.1044 - 1.1219."

PS: Copy signals, Trade and Earn on Forex4you - https://www.share4you.com/en/?affid=0fd9105