Weekly Forecast

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EUR/USD Weekly Forecast (25th April 2022 – 29th April 2022)

Apr 23, 2022 05:31


Fundamental view:

The Euro traded low against the greenback during the trading course of the week. The risk aversion market sentiment and the hawkish Fed was the major catalyst behind the move, however the hawkish surprise from the ECB policymakers favored the Euro and put a cap on the bullish trend of the quote. The vice-president Luis de Guindos said that he believes inflation is close to a peak, however he also added that a rate hike is possible in the second half of the year, depending on macroeconomic data. Also, Governor Pierre Wunsch said that he is willing to consider raising the deposit rate in July.

The need of safe haven due to riskier market sentiment favored the US dollar, The risk sentiment was exacerbated by the coronavirus outbreak in Shanghai and the Ukraine crisis. The Russian invasion of Ukraine accounts for thousands of dead civilians. Moscow’s persistent attacks on Mariupol have resulted in more international sanctions, while the US and several European countries have escalated their weapon provisions to Kyiv. St. Louis Fed President James Bullard made a case for a 75 bps rate hike if needed. Fed Jerome Powell endorsed front-loading rate hikes, confirming a 50 bps lift-off in May.

In this week,  German PPI monthly report on 20th April and US Initial jobless claims on 21st April boosted the uptrend whereas US EIA Crude Oil Stocks Change on 20th April and Eurozone Core CPI monthly report and Fed Chair Powell Speech on 21st April boosted downtrend for the pair.

The major economic events deciding the movement of the pair in the next week are Eurozone Ifo Business Climate at Apr 25, US Core Durable Goods Orders monthly report, US CB Consumer Confidence Index at Apr 26, US GDP quarterly report, US Initial Jobless Claims at Apr 28, Eurozone GDP quarterly report, US Employment Cost Index quarterly report and Michigan Consumer Sentiment at Apr 29. 

EUR/USD Weekly outlook:

Technical View:

Last week’s high was 0.04% higher than the previous week. Maintaining high at 1.0936 and low at 1.0761 showed a movement of 175 pips.

In the upcoming week we expect EUR/USD to show a bearish trend. The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. Should 1.0723 proves to be unreliable support then the pair may fall further to 1.0654 and 1.0548 respectively whereas a solid breakout above 1.0898 will open a clear path upward to 1.1004 and then will further raise up to 1.1073. Chart formation of a rounding top pattern in H4 chart sets prospects for a bearish trend. Bearish engulfing formation in H4 chart escalates the expectation for a bearish trend.

Sell: 1.0791 target at 1.0655 and stop loss at 1.0903


Alternate Scenario
Buy: 1.0903 target at 1.1072 and stop loss at 1.0791
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