Lacklustre Euro rally, with broad US Dollar weakness (EURUSD forecast)

Intermediate
  • As we highlighted in yesterday’s report, rising expectations of the unlocking of the European and US economies has been boosted over the past 24 hours with growing hopes from further trials of the remdesivir drug for treatment of COVID-19.
  • This has reinforced the global financial markets move to a “risk on” tone in latter April.
  • European and US share indices have broken to new recovery highs, whilst the US Dollar is lower against most currencies, predominantly against the “risk” currencies; Australian, New Zealand and Canadian Dollars.
  • However, the Euro rebound against the US Dollar has been lacklustre at best, which sees risks for further EURUSD weakness into May.

EURUSD day trade outlook: Hanging onto a negative bias, despite another rebound

Another rebound Wednesday but capped at 1.0888 and still below the barrier at 1.0905, and whilst capped below the higher level to hold onto negative forces from last week’s selloff through the April swing low at 1.0767, to keep the risk lower into Thursday.

·      We see a downside bias for 1.0783/75 and 1.0725/18; a break below quickly aims for 1.0664 and maybe the cycle low at 1.0633.

·      But above 1.0905 quickly targets 1.0939, which we would look to try to cap. Above aims for 1.0991.

EURUSD intermediate-term outlook

The early April selloff below 1.0782 set an intermediate-term bear trend.

  • Downside risks: We see an intermediate-term bear trend for 1.0633, 1.0500, 1.0340, maybe 1.0000.
  • What changes this? Above 1.1039 sees an intermediate-term shift from bearish to neutral, and above 1.1147 to an intermediate-term bull trend.

4 Hour EURUSD Chart

eurusd chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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