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MENAFN- Daily Forex) Nervousness is the pervading theme in the EUR/USD for the moment and the currency pair went into this weekend near the 1.09750 level.
- After trading around a high of nearly 1.12095 early last Monday, nervousness began to be seen in the EUR/USD.
- What started as small incremental moves lower early last Monday started to generate more selling power and by Tuesday a low around the 1.10475 was seen.
- Going into Friday's U.S Non-Farm Employment Change numbers the EUR/USD was nearly 1.10325.
After the stronger than anticipated U.S jobs numbers reports, the EUR/USD again fell into a hole with fierce selling and the currency pair did touch a depth of almost 1.09500 before creating some upwards momentum going into the week. Risk adverse trading which was seen early last week and the addition of shifting U.S Federal Reserve outlooks created a bearish storm lower.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Behavioral Sentiment and Murky Outlooks for the EUR/USD Near-Term
This week promises to deliver additional cautious sentiment. The Middle East conflict is far from resolved and needs to be kept an eye on. Forex trading the past week has certainly seen a flight to safe havens and as always the USD leads the way. However, the lows around the 1.10400 to 1.10500 level seen last week before more impetus downwards may have looked oversold. This until the U.S jobs numbers report on Friday threw more fire into the Forex trading pits, and more selling developed quickly.
The U.S will release key CPI data later this week. The inflation results will be pivotal. The combination of stronger U.S jobs numbers last Friday, Middle East tensions, and the shifting outlooks regarding what the Fed might do in November has created a volatile mix for traders and they need to be careful. While optimism is natural reflex, for the moment it appears caution will continue to sway behavioral sentiment in a large way. Monday's opening will be worthwhile to watch, but it will not be the final solution regarding a barometer reading, because many swirling winds will continue to affect the EUR/USD this week Levels Consideration and the Ability to Climb
Day traders have seen plenty of price velocity in the EUR/USD. The bullish trend which has been working over the mid-term certainly ran into a brick wall last week and suffered. The question now becomes when support levels will start to generate some durability and create upwards buying.
- Financial institutions may continue to lurk within nervous risk adverse Forex positions, but the notion that the Federal Reserve still may be in a position to remain dovish actually exists.
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The U.S inflation numbers via the Consumer Price Index reports that will be published this coming Thursday may prove to be important. - There is also a needed consideration via the European Central Bank's coming interest rate decision on the 17th of October – almost ten days from now.
EUR/USD Weekly Outlook:Speculative price range for EUR/USD is 1.09090 to 1.10990
The EUR/USD exchange rate suffered strong selling the past week and some day traders may be tempted to believe that support will start to be seen. Perhaps Friday's slight reversal higher going into the weekend was a sign that bullish perspectives will be displayed this coming week. However, because of the risk adverse conditions in the global markets, traders need to remain cautious and they should wait for a stronger trend to emerge upwards. The likelihood of a strong move upwards for the EUR/USD may only get impetus if the U.S inflation reports match expectations or are weaker than anticipated.
Technical traders may believe the current support levels are important, and if they do prove durable they would certainly continue to demonstrate the EUR/USD remains within sight of its higher price realm it was starting to trade in a rather comfortable fashion until last week. For the EUR/USD to move higher risk adverse conditions will have to decrease from the Middle East this week, and U.S inflation numbers will have to prove they are under control this coming Thursday. Until then EUR/USD traders should expect more tests and choppy conditions to be seen.
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