EUR/USD Forecast – Can Euro Correct Higher Vs US Dollar?

EUR/USD Forecast – Can Euro Correct Higher Vs US Dollar?

  • – The Euro fell sharply towards 1.1570 against the US Dollar before starting a short-term correction.
  • – There is an ascending channel forming with support at 1.1635 on the hourly chart of EUR/USD.
  • – Recently in China, the Caixin Services PMI for Oct 2017 was released.
  • – The outcome was above the forecast of 50.8 as there was a rise in the PMI from 50.6 to 51.2.

 

China’s Caixin Services PMI

Recently in China, the Caixin Services PMI for Oct 2017 was released. The market was positioned for a rise in the PMI from the last reading of 50.6 to 50.8 in Oct 2017.

 

The actual result was above the forecast of 50.8 as there was a rise from 50.6 to 51.2 in the Caixin Services PMI. On the other hand, the Composite Output index fell from the last reading of 51.4 to 51.0. The report added:

 

The softer increase in overall output was largely driven by a further slowdown in manufacturing production growth. Output at Chinese goods producers rose at only a marginal pace that was the weakest since June.

 

The market sentiment improved after the result, and that’s why there are chances of further recoveries in EUR/USD, depending on how today’s US nonfarm payrolls come out.

 

EUR/USD Technical Analysis

The Euro faced a lot of selling pressure this past week and declined below 1.1680 against the US Dollar. The EUR/USD pair traded as low as 1.1573 and later started a slow and steady upside correction above the 1.1600 handle.

 

EUR/USD Technical Analysis Euro US Dollar

 

The pair traded above the 23.6% Fib retracement level of the last decline from the 1.1836 high to 1.1573 low, and also managed to settle above the 100 hourly simple moving average. The pair seems to be following an ascending channel with support at 1.1635 on the hourly chart.

 

At present, the Euro buyers are struggling to clear the 38.2% Fib retracement level of the last decline from the 1.1836 high to 1.1573 low. It would need a close above 1.1700 for buyers to move back in control.

 

Any dips from the current levels toward the 1.1630 level can be seen as a buying opportunity, but traders need to be very careful heading into the all-important US NFP Oct’s release today.

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