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EUR/USD  peaked out and began sliding, bouncing off support at  1.2660. Dovish comments from Mario Draghi as well as strong US data contribute to a recovery of the US dollar after the FOMC  minutes madness. IMF meetings continue in Washington, and we have more Fed members to rock the boat as a  volatile week draws to an end.

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

  • Asian session: The pair flirted with 1.27 and resumed its falls in the European session…
  • Current range:  1.2660 to 1.27.

Further levels in both directions:

EURUSD October 10 2014 technical analysis fundamental outlook and sentiment for currency trading forex

  • Below:  1.2660, 1.26, 1.2570 and 1.25.
  • Above: 1.27, 1.2750, 1.28 and 1.2860
  • 1.2750 returns to its strong role.
  • 1.2660 strengthens as support.

EUR/USD Fundamentals

  • 6:45  French Industrial Production. Exp. -0.2%, actual 0%.
  • 8:00 Italian industrial output. Exp. +0.6%.
  • 12:30 US  Import Prices. Exp. -0.5%.
  • 13:00 FOMC member Charles Plosser talks (hawk).
  • 18:00 US Federal Budget Balance.
  • 19:30 US FOMC member Richard Fisher talks. More speeches  are scheduled during the weekend.

* All times are GMT.

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

EUR/USD Sentiment

  • Euro rate hikes not before 2017: In his speech in Washington, Draghi maintained a dovish tone,  vowing to do what is necessary to battle low inflation and  repeated his usual stance. What he also said is that markets see a move on the rates only in 2017, and this is certainly a long time off. The euro dropped on Draghi’s comments.
  • Dovish FOMC minutes: The meeting minutes from the latest FOMC meeting showed that the Fed is worried about global growth and also about the strength of the dollar, that could both hurt exports and trigger disinflationary pressures. The dollar fell across the board but later recovered.
  • Strong US data: The JOLTS figure was the best since 2001 and also the Non-Farm Payrolls were quite good. This seems to be forgotten now as the dollar bears regained control after a very long time. They were joined by another strong jobs number: weekly claims remained low at 287K, making the moving average the lowest since 2006. The good data gave the impression that the dovish minutes are somewhat outdated.
  • German weakness:  Both German factory orders and industrial output fell sharply in August. While there is some seasonality here, this “hard data” contrary to the “soft data” coming from PMIs, is certainly worrying. The miss the trade balance adds to the mix.

In our latest podcast, we talk about the US labor market, run down the FOMC minutes, reflect on falling oil and discuss next week’s events:

Download it directly here.

Subscribe to our podcast  on iTunes.