EUR/USD Price Forecast: Recovery has further legs to go

EUR/USD looks to consolidate the breakout of the 1.18 mark.
US politics, stimulus debate, Brexit, EU Summit take centre stage this week.

Pablo Piovano FXStreet

EUR/USD alternates gains with losses at the beginning of the week following Friday’s strong performance, managing to extend the gradual recovery further north of the key barrier at 1.18 the figure.

Indeed, the continuation of the offered bias around the greenback has been sustaining the rebound in the pair in the last couple of weeks, all in response to the resumption of discussions among US policymakers over another stimulus package and a probable win by Democrat Joe Biden at the upcoming presidential elections (November 3), which according to market consensus is seen as negative for the buck.

Moving forward, investors will closely follow the developments of another crucial week regarding UK-EU Brexit talks and the EU Summit on October 15-16 along with the German ZEW survey (Tuesday) and key ECB-speakers.

Near-term Outlook

Further upside in EUR/USD is expected to initially test 1.1917 (September 10) ahead of 1.1965 (August 18), while a move to the 2020 high just beyond 1.2000 the figure is seen unlikely for the time being at least. The resumption of the selling bias could see the Fibo level in the 1.17 neighbourhood retested in the near-term, although a deeper pullback to September’s low near 1.1600 is not favoured at the moment.

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Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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