Easter Week Forex Predictions You Should Read Now

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Easter Week Forex Predictions You Should Read Now

Trading volumes remain thin as major FX hubs across Europe and the US are closed in celebration of Good Friday and the East er Holiday. However, the US Dollar remained strong across the board and made solid advancements against its main counterparts this week. Whether these gains will extend into next week remains to be seen so let’s have a look and gauge the most probable scenarios.

EUR/USD – Technical Outlook

Currently trading at 1.1245, the pair had a bearish week, partly due to mixed German economic data but US Dollar strength played a big role as well. T he bulls failed several times to break the resistance at 1.1325, which resulted in a sell-off that took price below the 100-period Exponential Moving Average on the 4-hour chart. This pair is now in close vicinity of support at 1.1215.We will likely see a touch of the mentioned support but low volumes will be present through the first part of the coming week. This may generate alternating periods of high and low volatility, with choppy price action, until the holiday is over.

GBP/USD – Technical Outlook

This pair is trading right on the 1.3000 psychological level after breaking a bullish trend line. There is a chance of an extended drop so be careful with your trades. The break of the long term bullish trend line (daily chart above) marks an important victory for the bears and opens the door for a touch of 1.2800 – 1.2790. However, such a move will take more than one week unless something outstanding happens on the political scene. A quick climb above the 100 days EMA (daily chart above) and above the trend line would invalidate a bearish scenario for the time being.

USD/CHF – Technical Outlook

The US Dollar posted solid gains against the Swiss Franc over the last 4 weeks. This week the pair finally managed to break the long term resistance located at 1.010. The weekly chart above shows the pair edging above 1.010 resistance and, although the week is not over, this looks like a true break. If we get a weekly close above resistance the 1.01 level will turn into support. Once confirmed that will open the door for an extended climb with 1.033 as target. On the lower time frames, the pair is overbought which indicates that a retracement may be in order before other significant advances take place.

USD/JPY – Technical Outlook

This pair is currently trading at 111.90 and in close vicinity of the previous resistance at 112.15. Recent price action created a double top at 112.15 and will determine the next medium-term direction. A bounce lower will probably take the pair into the 100 days EMA and into the support at 110.90 – 111.00, while a break will open the door for 113.00. It’s possible that either scenario will take more than a week to develop, considering the low volumes generated by Easter celebrations, so don’t get too excited by near-term price action.

EUR/USD Forecast Apr. 2-6 – Will it pick a direction after Easter?

EUR/USD made a move to the upside but quickly returned to the known range. Will it pick a new direction now? Inflation figures and PMI data stand out as a new quarter begins. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Germany’s inflation advanced in March but fell short of expectations. Import prices followed the same path and Spain’s CPI also disappointed. In the US, GDP was upgraded to 2.9% in Q4 2020 while other data did not surprise. Trade tensions eased with some positive noises from China and the US while stocks remained jittery. The turbulence eventually slowed down as markets set into the long weekend.

EUR/USD daily chart with support and resistance lines on it. Click to enlarge:

  1. German Retail Sales: Tuesday, 6:00. German consumers squeezed their shopping for the second month in a row: sales dropped by 0.7% in January. A bounce of 0.7% is on the cards for February.
  2. Spanish Unemployment Change: Tuesday, 7:00. Spain, the fourth-largest economy in the euro-zone, suffers from a high unemployment rate. Its early measure of changes in the numbers of the jobless is an important indicator. After a drop of 6,300 in February, March is expected to see a slide of 47,500.
  3. Manufacturing PMIs: Tuesday: 7:15 for Spain, 7:45 for Italy, the final French number at 7:50, final German figure at 7:55 and the final euro-zone number for March at 8:00. Back in February, Markit’s forward-looking indicator for the manufacturing sector stood at 56 points, reflecting solid growth. A drop to 54.7 is on the cards now. Italy, the third-largest economy, had a score of 56.8 and 55.6 is projected now. The initial figure for France for March stood at 53.6, for Germany at 58.4 and for the euro-zone at 56.6. A confirmation of these initial reads is likely now.
  4. Flash inflation: Wednesday, 9:00. The initial read for inflation in March is expected to show an increase in CPI from 1.1% to 1.4% y/y and core CPI from 1% to 1.1%. However, expectations may have dampened after Germany’s figures came out below expectations. The ECB is likely to taper down its bond buys in September and end it completely at the end of the year. However, there is a fierce internal debate within the Governing Council between the doves such as President Draghi and the hawks, led by the leading candidate to replace him, Jens Weidmann. Inflation is the single needle in the ECB’s compass and any rise or fall matters.
  5. Unemployment Rate: Wednesday, 9:00. The jobless rate in the euro-zone has been falling gradually. It reached 8.6% in January and yet another drop to 8.5% is expected now. The unemployment rate was above 12% in 2020.
  6. German Factory Orders: Thursday, 6:00. The volume of orders dropped by a whopping 3.9% in January, but it is important to remember that the indicator is quite volatile. An increase of 1.6% is projected for February.
  7. Services PMI data: Thursday, 7:15 for Spain, 7:45 for Italy, the final French number at 7:50, final German figure at 7:55 and the final euro-zone number for March at 8:00. Spain’s services PMI was 57.3 in February, and a drop to 56.2 is projected for March. Italy had a level of 55 points and a significant drop to 53.9 is on the cards now. The initial French figure for March stood at 56.8, the German one at 54.2, and the whole euro-zone had 55. The final print is expected to confirm the initial estimates.
  8. PPI: Thursday, 9:00. Changes in producer prices feed into consumer prices. Back in February, the PPI rose by 0.4%. A flat read is expected for March. Note that German import prices dropped, indicating a potential downturn here as well.
  9. Retail Sales: Thursday, 9:00. The volume of retail sales slipped by 0.1% in January and February is expected to show a bounce back of 0.6%. Germany’s numbers published earlier in the week may impact the expectations for the figure for the whole of the euro-zone.
  10. German Industrial Production: Friday, 6:00. Similar to the factory orders measure, also industrial output slipped, but only by 0.1% in January. A rise of 0.2% is expected now.
  11. French Trade Balance: Friday, 6:45. The second-largest economy had a wide trade deficit of 5.6 billion euros, contrary to Germany’s chronic surpluses. A slightly narrower deficit is on the cards now: €5.3 billion.
  12. Retail PMI: Friday, 9:10. Markit’s last word for the week comes via the gauge for the retail sales. In February, the figure stood at 52.3 points, just a bit above the 50 point mark that separates expansion and contraction. A similar figure is likely now.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar kicked off the week by moving higher, eventually rising above 1.2450 mentioned last week. The pair then turned south, ending the week close to where it started it.

Technical lines from top to bottom:

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1.2555 is the three-year high the pair reached in mid-February. 1.2477 was the high point in March but did not hold up for long.

1.2445 capped the pair in early March and remains important. The next important level is only 1.2335 which supported EURUSD in mid-February and is a pivotal line.

Further below, 1.2270 was a swing low in mid-February and mid-March. It is followed by 1.2240 that supported the pair during two consecutive days in mid-March.

1.2155 was a low point in early March and the last line before 1.2090, the 2020 high.

I am bearish on EUR/USD

In this ugly contest, the euro is now the uglier currency, with slowing inflation and weakening growth. Economic signs from the US economy have been improving. This bias may change quickly though.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay’s Google Profile

EUR/USD Forecast Mar. 26-30 – Ready to rise?

EUR/USD rocked and rolled, ending the week slightly higher. Will it pick a new direction in the last week of March? Preliminary inflation numbers stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

Further signs of a peak in euro-zone showed up with PMI data all falling below expectations, and also the German Economic Sentiment dropped sharply. We may see the result of these forward-looking indices later on. In the US, the Fed raised rates as expected but left the projection for 2020 unchanged at three hikes. Powell voiced concerns about businesses from trade policy, which became an issue for the greenback later on, as Trump imposed tariffs on China. This weighed on stocks and the dollar.

EUR/USD daily graph with support and resistance lines on it. Click to enlarge:

  1. Jens Weidmann talks Monday, 9:30. The President of the German central bank, the Bundesbank, speaks in Vienna and the topic is “New Momentum for Europe”. Weidmann is seen as the leading candidate to replace Mario Draghi at the helm of the ECB next year and any policy ideas may impact the pair.
  2. German Import Prices: Tuesday, 6:00. Prices of imported goods serve as another gauge of inflation. Back in January, they increased by 0.5% and a setback is on the cards now: a drop of 0.3%.
  3. Spanish Flash CPI: Tuesday, 7:00. The fourth-largest economy saw significant changes in its inflation and beforehand deflation. After seeing an annual rise of 1.1% in CPI in February, the preliminary release for March is expected to show a rise to 1.5%.
  4. Monetary data: Tuesday, 8:00. The amount of money in circulation, M3 Money Supply, is increasing at a robust clip of 4.6% according to the data for January. However, it is slightly slower than beforehand. The same pace is predicted for February. Private loans have accelerated to 2.9% as of January and another small acceleration is projected for February, 3%.
  5. German GfK Consumer Climate: Wednesday, 6:00. This survey of some 2000 consumers has dropped from the highs and scored 10.8 points in February, still a high level. Another slide to 10.7 points is forecast for March.
  6. German Prelim CPI: Thursday: the German states publish the data during the morning and the all-German number is out at 12:00. Monthly prices increased by 0.5% in February, but they were not that robust on a yearly basis. Another such monthly increase is estimated for the initial publication for March and this would already raise also the y/y figure. The data feeds into the all-European number due after the Easter weekend.
  7. German Unemployment Change: Thursday, 7:55. The German labor market continues its ascent with consistent monthly drops in the numbers of the jobless. After a slide of 22K in January, a fall of 15K is predicted for February.
  8. French Prelim CPI: Friday, 6:45. The second-largest economy in the euro-zone has seen prices stagnate in February and a jump of 0.8% m/m is on the cards for March.
  9. French Consumer Spending: Friday, 6:45. Consumers have reduced their spending in January with a disappointing drop of 1.9%. An increase of 2.2% is on the cards now.
  10. Italian Prelim CPI: Friday, 9:00. The third-largest economy closes the list of initial inflation data. A repeat of the minor rise of 0.1% is projected. The country data and the all-European figures are usually released in the same week and the Easter holiday separates them this time.

* All times are GMT

EUR/USD Technical Analysis

Once again, euro/dollar kicked off the week by clinging to the 1.2360 level discussed last week. It then dropped to around 1.2240 before rebounding and closing just above the previous close.

Technical lines from top to bottom:

1.2650 is where the long-term downwards resistance level dating from 2008 meets this month’s levels. Further below, the recent swing high of 1.2555 may serve as resistance.

1.2450 was a swing high in March 2020. 1.2360 provided support to the pair in early February and now switches to resistance.

1.2260 was a support line in mid-February. 1.22 is a round number and also a level of comfort in February. 1.2155 was the low point in early March.

The 2020 peak of 1.2090 remains essential. 1.20 is the obvious round level and also worked as resistance in September.

1.1950 was the high level seen in November and a stepping stone towards 1.20. 1.1860 capped the pair in August and in October while working as support in September.

I turn from neutral to bullish on EUR/USD

While euro-zone growth has peaked, the prospects for the US are worse: the Fed’s dovish hike accompanied by trade wars weigh on the US dollar. At the moment, the euro-zone trades with everybody. Slightly higher inflation may add to the gradual climb.

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