EUR/USD Oct. 2 – Getting of a sense of high

EUR/USD  has seen some excitement, with a rise to 1.2673 and a slide all the way back down to the  previous range. A weak figure from the US  already accumulated into a significant correction for the US dollar. Is the pair changing direction or is it just a correction? A lot depends on Mario Draghi. The ECB meeting today is left, right and center.

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:

• Below: 1.2570,  1.25, 1.2460 and 1.24.
• Above:  1.2620, 1.2660, 1.2750 and 1.28.
• 1.2660 is strong resistance- where the now broken uptrend began.
• 1.2570 is the new low and becoming stronger.

EUR/USD Fundamentals

• 7:00  Spanish Unemployment Change. Exp. 19.7K.
• 9:00  PPI. Exp. -0.2%.
• 11:45 ECB rate decision. No  change expected.
• 12:30 ECB press conference. This is where the action awaits. Preview:  Draghi to hit the euro when it’s down? 5 topics to watch out for
• 12:30 US jobless claims. Exp. 299K.
• 14:00 US factory orders. Exp. -9.4%.

* All times are GMT.

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

EUR/USD Sentiment

• All eyes on Draghi: No change is expected from the ECB after September’s blitz and the declaration that rates have reached their lower bound. However, a lot depends on what Draghi says: details about the ABS, views on inflation, etc. Here is the preview:  Draghi to hit the euro when it’s down? 5 topics to watch out for
• Rock bottom inflation: The ECB convenes as the level of  inflation in the euro-zone is at rock bottom levels in both CPI, 0.3% and core CPI, 0.7%. They have never been this low together. The big question remains: will  the  low value of the euro be eventually reflected in higher inflation or is the situation even more dire?
• Weak US data: Most data points this week have disappointed. Consumer confidence erased the gains, Chicago PMI dropped and the last straw was the ISM Manufacturing PMI. This already triggered a correction and the US dollar sold off. However, we are already beginning to see a correction. Today’s jobless claims provide the last hint towards tomorrow’s big event: the Non-Farm Payrolls. This could be decisive for the dollar,  especially after last month’s short fall.

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

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