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EUR/USD  is enjoying the significantly higher ranges, holding on to gains achieved on a post NFP sell off of the US dollar. No particular reason ignited the fall in what seemed like a nice profit taking of dollar longs. Nevertheless, EUR/USD was still unable to retouch the post Draghi highs and the result is a lower high, indicating weakness. This was exacerbated by the terrible German industrial output number.  The  calendar  becomes  busier. What’s the next direction for EUR/USD?

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

  • Asian session: The pair could not hold above 1.27 and fell back down.
  • Current range:  1.2660 to 1.27.

Further levels in both directions:

EURUSD October 7 2014 technical view for currency trading euro dollar forex

  • Below:  1.26, 1.2570, 1.25, 1.2445 and 1.24
  • Above: 1.2660, 1.27 and 1.2750.
  • 1.2660 is strong resistance- where the now broken uptrend began.
  • 1.25 is a very round number (USD/EUR 0.80) and proved its strength.

EUR/USD Fundamentals

  • 6:00  German Industrial Production. Exp. -1.4%, actual -4%. Big disappointment.
  • 6:45 French government budget balance.
  • 14:00 US JOLTS Job Openings. Exp. 4.71 million.
  • 14:00 US  IBD/TIPP Economic Optimism. Exp. 46.3 points.
  • 17:20. US FOMC member  Narayana Kocherlakota talks. He is a dove.
  • 19:00 US FOMC member Bill Dudley talks. He recently mentioned dollar strength.
  • 19:00 US consumer credit.

* All times are GMT.

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

EUR/USD Sentiment

  • Dollar sell-off: After the strong NFP (see below) came the hangover. In an orderly fashion,  the dollar was sold off and EUR/USD rose gradually, even temporarily breaking above 1.2660. However, as the chart shows, this has resulted in a higher low.
  • Strong NFP: The US gained 248K jobs and the unemployment rate fell to 5.9%. In addition, revisions to previous months sealed the doubts that the US job market was slowing down. Things look brighter and the US dollar rallied. EUR/USD touched 1.25 but couldn’t break lower.
  • FOMC minutes  anticipated: The minutes from the latest meeting might be more  hawkish than the message we  hear from Chair Yellen, given  previous releases. This is the big event of the week, due on Wednesday. JOLTS is also closely followed by the Fed.
  • Draghi doesn’t rock the boat: Not only did the ECB refrain from action, but it also refrained from details. A timetable for the ABS was all we got, but with the absence of a size for the ABS and without a clear mention of QE, markets got the impression that Draghi is not ready to do more just yet and the euro reacted with a rise. However, not acting doesn’t mean resolving the  situation, and the euro’s gains faded. Draghi speaks later in the week.

In our latest podcast, we  discuss the big events for October:

Download it directly here.

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