The mood seems negative in the EUR/USD but Chief Global Strategist at City Index Ashraf Laidi commented in his twitter account about a possible "DOJI candle on the daily EURUSD chart," and he reminded that "Doji candles are bullish especially when formed at the end of a declining leg."
According to the last CFTC Commitment of Trader report, the EUR/USD net shorts rose slightly to 55K contracts in the week through October 23rd from 53K the previous week, still near 52-week bullish extremes.
On the day, The Euro fell to a 2-week low of 1.2881 during the Friday's European session after Spain reported a record high unemployment rate of 25% and amid lingering concerns about Greece. However, the pair managed to erase losses after news of progress on Spain bank bailout offset pessimism.
In the short term, the technical picture still looks negative, with hourly indicators below their midlines but correcting from oversold levels. Accelerations through the 1.2880 area could led the pair toward 1.2850 en route to 1.2836 where the 200-day SMA should offer strong support. Loss of this latter would be a very bearish sign. On the upside, regain of 1.3000 could provide relief.
According to the TD Securities team, the EUR/USD is consolidating and "underlying bias remains higher still we feel." TD thinks that "key support in the 1.2800/70 region will underpin the EUR and providing it does, the price action essentially reflects a sideways
consolidation range ahead of the next leg up."
The medium-term trends are "still EUR-bullish," comments the financial institution. "Key weekly resistance points are 1.3047 and 1.3126 (trend, top of a small bull triangle) on the weekly chart; a move above the latter would be very bullish, we think. Weekly support is 1.2830/40." TD still prefer "to look for opportunities to buy dips while 1.28 holds."
The week ahead:
As for the next week, investors should pay attention to Personal Income and expending, Consumer Confidence, ISM Manufacturing, ADP Employment and the employment report with its so-called Nonfarm Payrolls in the United States. In Europe: CPIs, GDP in Spain, business and economic sentiments. GDP figures in Canada and the PMIs across the world, including Eurozone, US and China.
The most important events next week are:
1. US Nonfarm Payrolls and October employment report in US (Nov 02)
2. PMIs in China, Eurozone, UK and US.
3. October US ISM Manufacturing PMI (Nov 01)
4. US ADP Employment October Change (Oct 31)
5. Preliminary Consumer Price Index in Germany (Oct 29)
Finally, the FXstreet.com's currencies forecast poll has just been released, with its Experts, Banks & Brokers' targets:
EUR/USD: Experts and banks Short-term euro estimates still look constructive.
GBP/USD: Sterling's outperformance against its rivals is seen in moderate expectation for the near-term.
USD/JPY: Increased volatility in the yen shifts forecasts to 80.00.
USD/CHF: Swissy forecasts show negative sentiment one and three months ahead.