EUR/USD Forecast: Finishing the month with substantial gains
EUR/USD Current Price: 1.1143
- European Q3 Gross Domestic Product came in better than anticipated, growth remains subdued.
- US Nonfarm Payroll report to be out Friday could be a miss the market’s expectations.
- EUR/USD pulled back from monthly highs but retained its bullish stance.
The EUR/USD pair seesawed between gains and losses, finishing the day pretty much unchanged in the 1.1150 price zone. The pair traded as high as 1.1175, reaching such a high following the release of some encouraging European data, and as the dollar remained pressured by Fed’s echoes. The EU reported its preliminary estimate of Q3 GDP, up by 0.2%, slightly above the expected 0.1%, and preliminary October inflation, with the core yearly CPI up to 1.1% from 1.0%. German data, however, missed the market’s expectations, as Retail Sales rose by less-than-anticipated in September, up by 0.1% MoM and by 3.4% YoY. The following decline came as a result of headlines reporting that China was said to doubt it could achieve a long-term trade deal with Trump, prompting speculative interest into safe-haven assets.
The US released unemployment claims, that rose to 218K in the week ended October 25, while US-based employers announced job cuts of 50,275 in October, 20.97% higher than the 41,557 announced in the previous month. Also, core PCE inflation remained steady at 1.7% yearly basis. The numbers anticipate a weak Nonfarm Payroll October report. The US economy is expected to have added 89K new jobs in October, while the unemployment rate is seen ticking up to 3.6%. Wages’ growth is seen within average, up by 0.3% MoM and by 3.0% YoY.
EUR/USD short-term technical outlook
The EUR/USD pair was unable to advance beyond the October high at 1.1179 but ends the day, and the month quite close to it, which skews the risk to the upside. The short-term picture favours additional advances, as, in the 4-hour chart, the pair is above all of its moving averages, with the 20 SMA heading firmly north. Also, technical indicators have retreated from overbought levels, but have decelerated their declines, holding well into positive ground. The bullish potential will likely increase on a break above 1.1180, with room then to extend its advance toward the 1.1240/50 price zone.
Support levels: 1.1115 1.1080 1.1065
Resistance levels: 1.1180 1.1210 1.1245
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
