EURUSD Weekly Forex Forecast – 22nd to 26th Oct 2018
The week ahead is shaping up to be a quiet week. Data from the Eurozone will cover the monthly flash PMI’s for the manufacturing and services sector. Overall economic activity in the sectors is expected to remain unchanged and maintain the current pace of momentum. With lack of economic data to go by, the ECB’s monetary policy meeting will stand out. No changes are expected as the central bank will maintain its stance on ending QE this December. The meeting minutes come on the back of last week’s FOMC meeting minutes.
Investors will be looking to the ECB’s forward guidance, which will play a big role in shaping the expectations on the timing of the interest rate hikes in the Eurozone. The markets could see some volatility especially if the ECB officials come out dovish. Data from the U.S. is quiet for the most part. Friday’s third quarter advance GDP report will be closely watched. The U.S. economy is expected to maintain its 4% quarterly growth rate on average. While data from Switzerland is quiet, Japan will be releasing its monthly inflation figures.
Chart set up: The EURUSD currency pair failed to hold on to the gains near 1.1547 and price action eased below this level. By Friday’s close, the common currency was seen falling back to the lows established from 10th September and rebounded strongly toward the closing session.
Key support/resistance levels:
Support: 1.1449; Resistance: 1.1547
Price action shows a potential double bottom pattern being formed at the support level of 1.1449. If the EURUSD maintains the gains then the resistance level at 1.1547 will be tested. A breakout above this level is required for the EURUSD to post further gains. The double bottom pattern puts the minimum upside target to 1.1702 which could be tested in the near term. For the week ahead, the EURUSD is expected to be bullish.
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