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EUR/USD  is hugging the 1.25 level, rising from the lows seen early in the week  and currently unable to pick a new direction. US data was good so far this week ahead of the Non-Farm Payrolls while Spanish jobless claims disappointment. Before that, we have midterm elections in the US and some other important data. Will we see a downwards move ahead of the big events? It is certainly possible.

Here’s a quick update on technicals, fundamentals and sentiment moving the pair.

  • Asian session: The pair managed to crawl back above 1.25.
  • Current range:  1.25 to 1.2570.

Further levels in both directions:

EURUSD November 4 2014 technical 1 hour chart fundamental outlook sentiment for euro dollar trading

  • Below:  1.25, 1.2440, 1.2360, 1.2250.
  • Above:  1.2570, 1.2620, 1.2660, 1.2750.
  • 1.2440 is an old line and also the recent low, making it key support.
  • 1.2660 is strong resistance now.

EUR/USD Fundamentals

  • 8:00  Spanish Unemployment Change. Exp. 23.4K, actual 79.2K.
  • 10:00 EU Economic Forecasts
  • 10:00  Euro-zone PPI. Exp. 0%.
  • 13:30 US Trade Balance. Exp. -40 billion.
  • 15:00 US Factory Orders. Exp. -0.4%.
  • 15:00 US  IBD/TIPP Economic Optimism. Exp. 46.3 points.

* All times are GMT.

For more events and lines, see the  Euro to dollar  forecast.

EUR/USD Sentiment

  • Midterm elections: All House seats and a third of the Senate seats are up for grabs. The House is expected to remain in Republican hands while the Senate  majority could also shift from  Democrats to Republicans. In the current political atmosphere, there seems to be little chance the new composition of Congress will be able to push  reforms. Nevertheless, these elections are set to impact markets.
  • ECB eyed: The  European Central Bank convenes on Thursday on the backdrop of  ongoing weak inflation, despite a weaker euro, and it’s not only oil prices. Will Draghi hint about more aggressive steps?  There is speculation about outright QE or buying corporate bonds, but both seem unlikely. A vague hint about a “massive” or “sizable” expansion could do the job.
  • Hawkish Fed: The Fed ended QE and also  sounded quite bullish about employment, acknowledging “solid job gains”. In addition, Yellen and her colleagues were not  too worried about  inflation and there was one dovish dissenter for a change. All this supported the greenback.
  • Strong US data: GDP grew at an annual level of 3.5% in the US, better than expectations. While the internal  components did not shine, the  general picture is positive and this notion strengthened with a beat in the ISM Manufacturing PMI, the first hint towards the NFP. Tomorrow we get ADP and the services sector PMI.

In our latest podcast, we  review  November’s big event and run down the recent ones:

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