EUR/USD Fundamental Analysis – week of October 17, 2016 – Forecast

EURUSD closed right at the bottom at the end of the week, at 1.0970, which is right at some massive support. The open on Monday will be key and the price action that is exhibited on Monday will be key as well to see if the current bearish run on this pair will hold or whether there will be a bounce from this support. So far, the bounces have been very weak and have not been more than 50-60 pips and this does not inspire much confidence for the bulls and hence Monday will be key and will hopefully answer the doubts in the bulls. So far the sellers are fully in control and the USD seems to be going from strength to strength and the bull run on the USD seems to be set to continue in the coming week as well and it will be interesting to see whether the euro will be able to survive the onslaught.

Looking ahead to the upcoming week, we have a slew of data from the US on different days of the week and that includes the CPI as well. We have to wait and see how the data comes out and see if the data is enough to fuel the rate hike in December rumors or whether it will put water into the fire. We also have the ECB conference which is likely to cause some volatility in the pair and then the US Presidential debate (the final one) scheduled for Wednesday which is usually a nice spectacle especially for non-Americans ! With the slew of data, it promises a lot of volatility in the pair. The support is very near at 1.0950 and the region between 1.0900 and 1.0950 would be a very tough nut to crack but if there is a clear break, then bulls better watch out as we might then be in for a large fall and a long bearish run.

As of now, the sellers seem fully in control but we believe that Monday would be key to set the tone for the rest of the week.