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EURUSD. Forecast for the next week and month

July 30, 2020

July 30, 2020

EURUSD. Forecast for the next week and monthMikhail Hypov

In this article I’m going to analyse the most popular Forex pair [EURUSD][1] from a technical point of view. I’ll focus on the medium- and short-term forecasts for the next week and month, but I’ll analyse traditionally the global picture too. Let’s start with the biggest time- frame of 12 months.![LiteForex: EURUSD. Forecast for the next week and month][2]

Euro/Dollar pair: Actual scenarios for the next years, for 2020, for

this month and the next week

The chart above shows the 50-year period of [EURUSD][3]’s evolution. The pair’s movements are technical and they are located in an ascending channel. The ultimate candlestick of this year is testing the lower limit of the ascending channel again, which may mean a retracement in the context of the next few years.![LiteForex: EURUSD. Forecast for the next week and month][4]

By its wave structure this evolution looks like a 5-wave impulse in the first wave of the global super cycle. In accordance with this logic, we are observing a correction. The chart above shows its classic example in the form of a zigzag where wave (B)’s length is 0.5 of wave (A) at around 1.31 and wave ©’s length is 0.618 of wave (A). Considering the projection of wave (B)’s peak, the zigzag falls into the area of EUR/USD parity.

![LiteForex: EURUSD. Forecast for the next week and month][5]

In a different scenario of the ABC correction’s development we can see an ascending triangle in wave (B) with a deeper drawdown of wave © close to 0.9. Considering the global uncertainty and geopolitical contradictions between Europe and the US, and the US and China, as well the general macroeconomic state of those three regions, I’m inclined to the second scenario.  But regardless of which scenario is true, the overall evolution points to  [EURUSD][3]’s good growing prospects this year and probably next year too, at least. The nearest growth target is at the lower limit of the trading channel marked in violet, at around 1.23 - 1.24 points. So, bullish forecasts for [EURUSD][3] will have priority up to the end of this year.![LiteForex: EURUSD. Forecast for the next week and month][6]

Thus we’ve found out that bullish sentiment will prevail in the next few years. A doji marked with a red arrow in the 1-month time frame was a typical reversal pattern. There was a tremendous splash of volumes when that candlestick was forming: it pointed to the presence of strong buyers that didn’t allow pushing [EURUSD][3] to its recent lows. This was a reversal moment in forming the local bullish trend. The impulse of the current candlestick has already exceeded the trading channel’s range and came close to the upper limit of a bearish trend and the strong resistance levels of November 2005 and January 2010 (horizontal blue lines in the chart above). What’s more, the price  moved beyond the 2020 candlestick’s projection (grey area). According to the Pivot point indicator, the price approached S3 level. This accumulation of key levels puts up resistance to bulls and can oppose their current pressure.![LiteForex: EURUSD. Forecast for the next week and month][7]

The weekly chart confirms that the instrument is overbought. A few signals show it:

  1. ROC oscillator and TM Alignment are in the overbought zone. 

  2. Both indicators point to a bearish convergence, when the price doesn’t update maximums contrary to the indicator. I marked it as long red segments in the chart above.

  3. The volumes are decreasing within a growing local impulse, which indicates a fading of the impulse too (see the short red segment).

So we may conclude that a correction can happen in the next months and the current impulse’s potential is limited. Let’s get back to the wave structure of larger degree.

![LiteForex: EURUSD. Forecast for the next week and month][8]

As according to the global scenario we are in a diagonal triangle, the third wave is very likely to be  23.4% shorter than the first wave or at least not longer than the first wave. So we have strict limits of the current impulse’s growth at 1.23679 - 1.28394 for [EURUSD][3]. Also, these levels are located at the border of the multi-year trading channel and the first wave’s top, which indirectly confirms their reliability.![LiteForex: EURUSD. Forecast for the next week and month][9]

To determine the most precise moment of the third wave’s completion, we need to design its future structure. Since we know the start point of this wave structure, its key levels, wave ratios for a 5-wave impulse and the upper limits of the third wave, we can outline the future wave structure (see the blue wave structure in the chart above). We can’t say for sure that the price will be moving in this exact order according to the marked cycles. The nature of this impulse pattern will be more understandable only after the first and the second waves have formed. However, at the current stage we can suppose what the first wave of this structure will look like (marked with a circled “I”).  Let’s switch to the daily chart to define the limits of the first wave’s structure.![LiteForex: EURUSD. Forecast for the next week and month][10]

A five-wave impulse which started on 20 March 2020 is displayed in the chart above. This pattern is forming with a long wave 5, which gives us a certain reference. According to [Prechter’s ratios][11], long waves 5 usually reach 61.8% of the whole impulse’s length.  As the level of 61.8% crosses the fourth wave’s peak, we’ll have no difficulty drawing a projection of the fifth wave’s future peak.  It is at around  1.200, a psychologically strong resistance level on the one hand and a powerful magnet for bulls on the other hand. This fact indirectly confirms the adequacy of the selected target. But what about the indicators located in the overbought zone?![LiteForex: EURUSD. Forecast for the next week and month][12]

To understand where the fifth wave, marked with Roman numerals, will end in the turquoise wave structure, we will switch to the H4 timeframe.  As we can see in the chart above, the wave structure is not readable enough, so we should use the MACD indicator to determine wave cycles.

 It helps us to determine a period of time when the market was marked with the clearest and most stable trend movement. I’ve marked this range with blue lines. Thus, we can suppose the third wave with high probability. According to the classic theory, its reversal is characterized by a decrease in volumes and a divergence in oscillators.

As you can see in the chart above, both signals are clearly visible. The final signal for correction will cross the trend line of the third wave from above.  I’ve marked it with a bold red diagonal segment in the chart above.

Weekly trading plan and signals for EURUSD

Let’s make a forecast for this week.  As the third wave is long and has already reached the key level of 2.618, which is the upper limit of any third wave, we can expect its upcoming reversal in the short term.  The extension in the third wave indicates a strong bullish sentiment which will oppose a deep correction.

![LiteForex: EURUSD. Forecast for the next week and month][13]

Consider short positions from the current levels with small leverage for this fortnight.

The target is the nearest support level in the form of the traded channel at 1.16.

Stop loss is obligatory and should be placed above the latest local maximum at 1.18.

Profit/Risk ratio: 1.88. This value should apply to high-risk strategies only. Risk per trade shouldn’t exceed 1% of the portfolio amount.

Monthly trading plan for EURUSD

![LiteForex: EURUSD. Forecast for the next week and month][14]

A bullish scenario is the likeliest for a period of a few months.  The market is too overheated for buying at the current levels. Long positions can be opened relatively safely at 1.16 and averaged at 1.15, if such an opportunity occurs.

Bullish target:  1.20.

Stop loss should be placed below the peak of the third wave in the turquoise cycle, below 1.14 USD.

Below 1.16 for the first position:  the 1.73 Profit/loss ratio suits high-risk strategies.

Below 1.15 for the second position:  the 3.56 Profit/loss ratio suits conservative and moderate risk strategies.

I have traded [EURUSD][3] at LiteForex for many years with almost zero spreads and low swaps. So I think this broker is worth your trust and attention. Check it!

I’d like to remind you that all materials are provided for educational purposes only. They aren’t financial advice and don’t guarantee any profits. All trading decisions you make are your responsibility only.

Good luck and profits, everyone!

Yours,

Michael @Hypov

P.S. Did you like my article? Share it in social networks: it will be the best “thank you” :)

Ask me questions and comment below. I’ll be glad to answer your questions and give necessary explanations.

Useful links:

  • I recommend trying to trade with a reliable broker [here][15]. The system allows you to trade by yourself or copy successful traders from all across the globe.
  • Use my promo-code BLOG for getting deposit bonus 50% on LiteForex platform. Just enter this code in the appropriate field while [depositing][16] your trading account.
  • Telegram channel with high-quality analytics, Forex reviews, training articles, and other useful things for traders

Price chart of EURUSD in real time mode

![EURUSD. Forecast for the next week and month][17]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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  1. my.liteforex.com/trading/chart?symbol=EURUSD
  2. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_1.jpg?w=30&s=84558609f87e9c5aee662c545536c70f
  3. my.liteforex.com/trading/chart?symbol=EURUSD&returnUrl=true
  4. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_2.jpg?w=30&s=717ac57626357e79cfd7356a6b48a959
  5. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_3.jpg?w=30&s=0ceb8b8353cfb56aa3c66ec40e00d53b
  6. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_4.jpg?w=30&s=7729222aaa0427697107b4fd21e7b9dc
  7. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_5.jpg?w=30&s=98947717c7d2a198e349eb51e78f1594
  8. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_6.jpg?w=30&s=50fd09013cf2342834610e037f9371fb
  9. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_7.jpg?w=30&s=d93120fbab86a4a0146032722f5ad606
  10. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_8.jpg?w=30&s=18a4cec1bc8a26ae7a12ffb50d132b06
  11. www.liteforex.com/blog/for-professionals/market-wave-theory-by-robert-prechter-part-2-wave-degrees-and-more-guidelines-of-wave-alternation/
  12. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_9.jpg?w=30&s=e48ab1b4c043f16a321dda93c94c7474
  13. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_10.jpg?w=30&s=d890f0d52befc6d77dba2fbf7efaf1f2
  14. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_11.jpg?w=30&s=135f407ee47ff453bec64a08561d02e4
  15. my.liteforex.com/?category=analysts-opinions&slug=eurusd-forecast-for-the-next-week-and-month&openPopup=%2Fregistration%2Fpopup&utm_source=blog&utm_medium=article&utm_campaign=bonus
  16. my.liteforex.com/deposit/?category=analysts-opinions&slug=eurusd-forecast-for-the-next-week-and-month&promo_code=BLOG&utm_source=blog&utm_medium=article&utm_campaign=bonus
  17. cdn.liteforex.com/cache/uploads/blog_post/cryptocyrrency/hyipov/2020.07.30/EURUSD_hypov_logo.jpg?q=75&w=1000&s=d09658574757f858136e152c2b539fa8