EURUSD Monthly Forecast & Analysis – 22nd April 2022

Introduction

This trading week, the online brokers and investors are hoping to cope with the central banks’ steps to raise interest rates aggressively and the end of fiscal stimulus. The Ukraine court will also be responding to the document submitted by the Russian government if the peace deal between Ukraine and Russian authorities can be reached.

EURO and US News

INDUSTRIAL PRODUCTION M/M 

The industrial production report is released 45 days after the month ends, German and France zones account for about half of the Eurozone’s economic activities. The industrial production report is a leading indicator of the economic health of the European zones as production reacts quickly to the ups and downs in the business cycle while the correlation can be seen in the consumer condition in terms of earnings and employment conditions as well.

The traders, online brokers, and investors focus on the total change in the adjusted value of output produced by miners, manufacturers, and utilities. An outcome that is greater than the Forecast is good for the US currency but a lower outcome will not favor the currency.

The forecast is 0.8% while the previous is 0.0%.

Federal Reserve (Fed Chair Powell Speaks)

The USA will be hosting the IMF and world bank spring meeting in Washington DC. The panel of discussion will focus on the topic “Debate on the Global Economy”. The Federal Reserve Chair Jerome Powell is the head of banks and he controls the short-term interest rates and the investors 

If the statements are more hawkish than expected, it is good for the US currency and online brokers will be searching for clues on the interest rate

EURUSD Technical Analysis

Monthly Chart Objective: Down Trend Buildups 

Monthly Resistance   1.19092, 1.17000.

Monthly Support levels 1.08085, 1.06361.

The monthly chart shows that the EURUSD pair remains bearish as the price has made about 14.20% from the high of 01 June 2021 (1.22510) down to the support level of 02 March 2020. 

Factors influencing the market continue to strengthen the US dollar since the war on Ukraine started. The bearish run of 01 June 2021 has been sustained by the online brokers who are in short positions, a breakout below the current zone will take the price lower while a rejection of the price from these zones will mean that the price may reverse from the 02 March 2020 zones (1.06359).

As the trading activities enter into the mid-month of April, we expect the price to react around the psychological zones. The Euro made begin to see some level of recovery if all things around the European zone begin to easy in the favor of the euro economic activities.

Weekly Chart Down Trend

Weekly Resistance levels 1.14950, 1.19000

Weekly Support levels 1.07740, 1.11861

The EURUSD pair on the weekly chart is still bearish as the trend approaches the psychological zones. The market is in the area where the covid-19 pandemic closed the global economy and international borders were closed.

The price has slowed down as the price retest the previous support zone. Can the online brokers who want to go long turn the trend in their favor? We can see the trend reverse to a bullish rally from the support.

If the weekly momentum should continue to run and the price closes below the support zone, the bearish trend is not over and it wants to look for new support while the Euro will continue to be weak. 

Daily Chart Projections: Downtrend 

Daily Resistance Levels 1.1500, 1.11848

Daily Support levels 1.06488, 1.07478.

The market participants are treading carefully as the EURUSD pair is approaching the pre-pandemic zone of covid-19 as the momentum of the price slows towards the 1.07478 support level. Online brokers, investors, and other participants are also showing concerns about inflation and the Fed-rate-hike bets. The outcome of the Feds meeting will give the direction of the pair as the price seats on the psychological zone of the market.

The Euro forex will also recover from its loss if the Ukraine authorities can get the peace talks it requires. According to Kremlin, the Russian passed a document and it is up to Ukraine’s court regarding peace talks. If this deal comes through, the euro currency will see a good jump from the zone.

Conclusion and Weekly Price Objectives

The previous meeting of the FOMC suggested that the interest rate could be raised by 50basis points in its next meeting. Online brokers and institutions will be closely watched this week as they speak before the quiet period begins on Saturday.

If the Russian and Ukraine peace talk can be achieved for good, the EURUSD pair make begin to regain some lost positions in the coming weeks.

The Covid-19 battle is still going on as the recent lockdown in China has affected the supply network of building materials in the US.

Tagged with: EUR/USD