31 Oct: US$ looking under pressure. Euro heading above 1.1000? #fx #forex #eurusd

By | October 30, 2016
EURUSD: 1.0981
Resistance Support
1.1140 100 DMA 1.0945 Minor
1.1115 Weekly cloud base 1.0915 200 HMA
1.1085 55 WMA/Weekly Tenkan 1.0874 26 Oct low
1.1038 20 Oct high/(38.2% of 1.1326/1.0858) 1.0850 25 Oct low
1.0991 Friday high 1.0821 10 March low


The US dollar was hit hard by Friday’s FBI announcement, with EurUsd quickly taking out the minor resistance that had previously contained the topside and heading to a session high of 1.0991.

The shorter-term momentum indicators are mixed and thus it could be another choppy session ahead, with the hourlies finishing the week at mildly overbought levels suggesting some consolidation, at least for the first half of Monday. The 4 hourlies are leaning higher though, so a test of 1.1000+ could eventually be on the cards. The dailies also look more positive,  so for the time being I suspect we should hold off from selling into the current Euro strength as we could yet see a run towards 1.1040, above which would put the near term downtrend into some doubt, with the possibility of a bigger short squeeze towards 1.1085 and even to 1.1140. On the downside, support will be seen at 1.0950 and then again at 1.0900, below which looks unlikely to be seen today. If wrong, we could then head back to 1.0870/80 and then to 1.0850, below which would seem to open the way to the March low at 1.0821. Under here there is again only minimal support until 1.0775 and then again, little until the 2016 low at 1.0710 (Jan 5).  The Q3 EU GDP will be the main event today, although a range of 1.0940/1.1040 may cover it as we wait on the Fed announcement on Wednesday. Look out though for further political announcements that may cause increased election doubts, and which would keep the dollar under pressure.

24 Hour: Mildly bullish but prefer to sell rallies Medium Term: Mildly bearish

Economic data highlights will include:

M: German Retail Sales, EU Provisional Q3 GDP, CPI (Oct), US Personal Income/Spending, US Personal Consumption/Expenditure Index, Dallas Fed Mfg Business Climate, Chicago Purchasing Managers Index

T: All Saints Day Partial EU Holiday, US ISM/Markit Mfg PMIs, ISM Prices Paid, API Weekly Crude Oil Stock Inventory

W: ECB Non-Monetary Policy Meeting, EU Markit Manufacturing PMIs, US ADP Jobs data, ISM NY Index, EIA Crude Oil Stocks Weekly Change FOMC Meeting

T: EU Economic Bulletin, EU Unemployment, US Jobless Claims, Markit Composite PMI, ISM Non- Mfg PMI, Factory Orders,   EIA Crude Oil Stocks Weekly Change

F: EU Services/Composite PMIs, US Jobs data/NFP/Average Hourly Earnings data, Baker Hughes Oil Rig Count