The euro hit its highest level against the US dollar since February 2022. The reason for this was the increased expectations of the completion of the current tightening of the US Federal Reserve policy due to weaker-than-expected inflation data in the country. Meanwhile, investors believe that the European Central Bank has yet to cope with inflationary pressures in the eurozone, despite the slowdown in economic growth and lower inflation in the region. In June, inflation in the Eurozone fell to 5.5%, reaching a 17-month low, but the base rate is still well above the European Central Bank’s target of 2%. At the moment, interest rates in the eurozone are 3.5%.
EUR/USD Weekly Forecast July 17 — 21, 2023
The Euro/Dollar currency pair EUR/USD completes the trading week with aggressive growth near the area of 1.1234. The buyers managed to cancel the formation of the “Head and Shoulders” reversal pattern. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines up, which indicates pressure from buyers of the European currency and a likely continuation of growth already from current levels. At the moment, we should expect an attempt to develop the growth of quotes and test the resistance area near the level of 1.1345. Where is the expected rebound down and the continuation of the fall of the Euro Dollar. The potential target of the decline is the area below the level of 1.0865.
An additional signal in favor of a decrease in the EUR/USD currency pair on Forex will be a test of the resistance line on the relative strength index (RSI), the indicator values have reached critical levels. The second signal will be a rebound from the upper limit of the bullish one. Cancellation of the option of falling quotes of the Euro/Dollar pair in the current trading week July 17 — 21, 2023 will be a strong growth and a breakdown of the level of 1.1405. This will indicate a breakdown of the resistance area and continued growth of the pair to the area above the level of 1.1875. With the breakdown of the support area and the closing of quotes below the level of 1.1105. Expecting the resumption of the bearish trend for the pair is worth it only with the breakdown of the lower border of the bullish channel and the quotes fixing under the level of 1.0655.
Among the important news from America and Europe in the next trading week, which may have an impact on the EUR/USD rate, it is worth highlighting: United States Building Permits, EIA United States Crude Oil Stocks Change, United States Existing Home Sales.
EUR/USD Weekly Forecast July 17 — 21, 2023 suggests an attempt to develop a bullish correction and test the resistance area near the level of 1.1345. Where should we expect the price to bounce down and the pair continue to fall in the Forex market to the area below the level of 1.0865. An additional signal in favor of the decline will be a test of the resistance line on the relative strength index (RSI). Cancellation of the option of falling Euro Dollar will be a strong growth and a breakdown of the level of 1.1405. In this case, we should expect the pair to continue to rise with a potential target at the level of 1.1875.
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