SUMMARY: Trade Now
Moving Average: Neutral
Technical Indicators: Neutral
Fundamentals EUR/USD: Neutral/Neutral
EURUSD Live Chart
Technical Review by IRONFOREX
EURUSD traded higher breaking above the 1.0895 (S1) barrier. Nevertheless, the advance was stopped near the 1.0950 (R1) line and then the pair retreated again to challenge the 1.0895 (S1) line as a support.
The prevailing short-term trend is still to the downside, but I see signs that another corrective rebound may be on the cards before the bears decide to shoot again, perhaps for another test near 1.0950 (R1). Our short-term momentum indicators support the notion.
The RSI appears ready to cross back above its 50 line, while the MACD, although negative, stands above its trigger line and looks to be headed towards zero.
What is more, there is still positive divergence between both the indicators and the price action.
Zooming out to the daily chart, I see that the pair is still trading within the sideways range between 1.0800 and 1.1500. As a result, I keep my neutral stance with regards to the longer-term outlook.
• Support: 1.0895 (S1), 1.0860 (S2), 1.0820 (S3)
• Resistance: 1.0950 (R1), 1.1000 (R2), 1.1025 (R3)
Fundamental Review by IRONFOREX
Riksbank to keep rates unchanged for now Sweden’s inflation profile has deteriorated since Riksbank’s last gathering. Both the headline and the underlying inflation rates unexpectedly declined in September, raising bets that the world’s oldest central bank is not done easing yet.
We believe that the Bank will indeed ease further, but not at this meeting.
We expect the Bank to wait until its December gathering, mainly because we believe that the situation is not dire enough to trigger a knee-jerk response.
Although inflation is notably below the Riksbank’s forecasts, both EUR/SEK and USD/SEK have surged since the “Brexit” outcome, which could lift imported inflation in coming months.
What’s more, the Riksbank tends to follow the ECB’s footsteps (on fears of EUR/SEK sinking), and given that the ECB prefers to wait until December, Swedish officials are likely to follow suit.
However, we expect the Bank to maintain a very dovish bias, preparing markets for some form of action in December.
High volatility is for the big guys. EURUSD is a sell but staying neutral is better than suffering a hard attack.
1- 25% Long
2- 45% Short
3- 35% Neutral
Factors Influencing EURUSD
- Economic strength. A faster-growing U.S. economy strengthens the dollar against the euro, and a faster-growing European Union economy strengthens the euro against the dollar. When economic data released favours the U.S the dollar is likely to increase and when economic data released favours the European Union the euro is likely to increase.
- The services sector is by far the most important sector in the European Union, making up 69.4% of GDP, compared to the manufacturing industry with 28.4% of GDP and agriculture with only 2.3% of GDP. Other main sectors are agriculture and tourism.
- Interest rates. When U.S.interest rates are higher than those of key European economies, the dollar generally strengthens. When Eurozone interest rates are higher, the dollar usually weakens.
- Political instability.
– In U.S. numbers, the monthly release of the Non-Farm Employment Change released by the Bureau of Labor Statistics on the first Friday after the end of the month makes up one of the most important releases in the forex market. Other important U.S. employment numbers include Initial Jobless Claims which come out every Thursday.- In the Eurozone. Follow employment numbers for the Eurozone’s major economies such as Germany and France, as well as the consolidated numbers for the Eurozone.
- Sentiment Indicators.
– The German ZEW Economic Sentiment
– The University of Michigan Consumer Sentiment Indicator.
- Other economic indicators: Retail Sales, Inflation, Consumer Price, Producer Price Indexes, GDP and trade balance.