Fundamental :
The euro has remained weak…
The US dollar's moves on Friday constituted little more than a broad consolidation across the majors as the currency hardly shifted from Thursday's close. While there were some signs of stabilization in the markets, such as the drop in overnight interest rates, there were also indications that high volatility and lower liquidity will leave the markets prone to wild price swings. Indeed, the CBOE's VIX Volatility Index continues to trade dangerously close to Thursday's record high of 81.17 while the latest forex positioning report shows that open interest in pairs like EUR/USD and GBP/USD has been declining steadily, signaling lower liquidity. Overall, this leaves the notion of risk aversion in play, which tends to benefit the US dollar and explains why the currency was able to shrug off this morning's disappointing economic releases.
Clearly the US economy is at risk of recession, and this is why fed fund futures are pricing in a 25bp-50bp rate cut on October 29. Under normal circumstances, this would contribute to US dollar weakness but with risk trends remaining the primary driver of the markets, safe-haven flows have supported the greenback quite a bit.
The euro has remained weak due to a variety of factors, including broad US dollar strength due to safe-haven flows as well as negative interest rate expectations. According to our latest forex positioning report, the FXCM Speculative Sentiment Index (SSI) has recently flipped from net long EUR/USD to net short, and as a contrarian indicator, suggests that the pair could gain. There is no major European data scheduled to be released next week, but if we see that volatility dies down a bit and equities gain, the EUR/USD retracement higher could come sooner rather than later.
EURUSD Current Price : 1.3410
EURUSD Technical :
1. First she goes up to 1.3458 or more
2. After touch that price (1.3458) then she will goes down – wait for any confirmation on Stochastic Osc. in TF M5, M15 and M30 entering Overbought area. If it confirmed then we’ll go short to 1.3421.
3. After all those completed/closed wait until she is completing forming the wave.
4. Be aware of breaking any trendlines. She could breakthrough to 1.3515 1.3760 on upward or 1.3349 and 1.3260 on downward.
