EURUSD Weekly Forex Forecast – 4th to 9th Nov 2018
Fundamentals Outlook
The economic data for the week ahead will see the Eurozone’s manufacturing and services PMI numbers coming out. Given that the flash PMI’s signaled a modest decline in both the sectors, the markets will be looking to see how the Eurozone’s economic activity fared in the month of October. Data from Japan and Switzerland are relatively quiet for the most part of this week. Data from Japan will see some second tier data coming out. The BoJ will be releasing its monetary policy meeting minutes earlier in the week.
The economic data from the U.S. is also fairly quiet. The big event this week will be the U.S. mid-term elections. This could potentially keep the markets on the edge. Economic data over the week will see the release of the U.S. producer prices index and the ISM’s non-manufacturing PMI report. The FOMC will be holding its placeholder meeting on Thursday. No changes are expected at this week’s monetary policy meeting as the Fed will prepare the market for a December rate hike.
Chart set up: The euro currency was seen posting modest gains last week. However, the common currency still closed the week on a slightly bearish note. The rally off the support level at 1.1345 was met with the resistance level at 1.1449. This indicates that the price action is likely to remain trading flat within these levels.
Key support/resistance levels:
Support: 1.1345; Resistance: 1.1449
Commentary:
The EURUSD currency pair failed to capitalize on the weakness in the U.S. dollar. While most of the currencies rallied strongly, price action in the EURUSD was mostly muted. This comes as price action is stuck within the strong support and resistance levels. In the near term, we expect this sideways price action to continue. Given the volatility that is expected due to the U.S. mid term elections, we expect to see this range being breached. For the week ahead, the EURUSD is expected to be bearish.
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