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EUR/USD Key Levels to Watch this Week

EURUSD

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The EUR/USD exchange rate starts off the new week in lacklustre fashion and is seen at 1.1724, analyst Richard Perry of Hantec Markets says the exchange rate is lacking in conviction.

We are increasingly looking at EUR/USD as being a market lacking direction.

A two-week drift higher subsequently spent last week retracing back lower.

However, the market has spent recent sessions holding around the old 1.1695 support area with Friday’s small candlestick body filtering into an early lack of conviction again today.

EURUSD daily

Although we still see momentum indicators (RSI, MACD) broadly flattened, the falling Stochastics lends a slightly negative bias.

A decisive close below 1.1685 would open pressure on 1.1610 key September support.

Initial resistance at 1.1720/1.1745.

EURUSD forecasts

Markets continue to trade with a lack of certainty as newsflow of major macro factors remain on a knife edge.

However, slight chinks of light over the weekend are generating a mild positive risk bias this morning.

In one final attempt to break a deadlock on US fiscal support, Democrat House Speaker Pelosi gave a 48 hour deadline over the weekend.

It means that the next couple of days could generate elevated volatility on any announcements, but markets are taking this as a positive.

Furthermore, although no agreement has been reached yet between the EU and UK on a post-Brexit trade deal, there were suggestions over the weekend, that there could be changes to the controversial UK Internal Market Bill in order to ease the log-jam.

Sterling has ticked higher early today.

China’s Q3 GDP missed expectations (4.9% actual, versus 5.2% forecast), although other data for September (Retail Sales and Industrial Production) beat expectations to ease any negative aspect from the growth data.

Taking all that in, there is a very slight edge of positive bias to sentiment this morning. US yields are ticking higher, which is translating to marginal US dollar weakness (USD is still very much acting as a safe haven now).

US equity futures are taking a bit of a lead too, but this is coming to balance a disappointing drop into the close on Friday.