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EUR/USD Forecast Update 7 Nov 19

The EUR/USD appears to be trying to stage a bullish recovery after been bearish for most of the week.

Technical Analysis

On the 15 minutes chart, the EUR/USD is seeking to test immediate support of 1.11.

On the hourly chart, the EUR/USD is facing a challenge by the upper bollinger band. You can see the previous interaction about a day before near 1.11.

On the 4 hourly chart, we see a possible test on the 1.11 resistance. It is important to note the presence of the middle bollinger band which may provide additional resistive pressure. Furthermore in this time frame, previous price action is suggestive of an immediate resistance. The EUR/USD will need to clear this before staging an attempt to clear 1.11.

Looking at the daily chart, we see a double top chart pattern. If this plays out, we may be seeing the EUR/USD turn bearish. The middle bollinger band in this time frame is likely to add resistance to the 1.11 region. It is down to the momentum of the bullish price action to see if it has sufficient drive to push above.

Fundamental and Sentimental Considerations

The US ISM Non-Manufacturing PMI came out better than expected. The Purchasing Managers’ Index is a survey of purchasing managers and is important as the sentiment of purchasing managers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well while a cautious sentiment may see less business activities due to prudence. This development likely added positive sentiment for the US dollar.

It was reported that Chinese officials mentioned that the US is agreeable to a phased tariff reduction if deal is reached. This may be fuelling the risk appetite of the market at the moment. If this sentiment grows, we may see downside pressure on the US dollar as investors move on to riskier assets.

As analysts and investors review the newly released EU Economic Forecasts, we need to monitor closely on how this new information is shaping sentiment and price action.

Up Ahead

USA Prelim UoM Consumer Sentiment
Consumer surveys are influential as the sentiment of consumers is a leading indicator of economic health. A healthy sentiment suggests that an economy is moving along well and hence consumers are confident. This likely leads to increased retail sales. A cautious sentiment on the other hand may see consumers spend less in view of a perceived upcoming economic crisis.

Following an economic calendar is vital so that your forex trading plan factors in the events. Members can log in to their dashboard for a economic calendar.

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Traders should always practice proper money management and seek to understand the underlying tones for the market.

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