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Euro Forecast: EUR/USD Clears October Range on Soft US NFP Report

Article By: ,  Strategist
November 3, 2023 1:50 PM

Euro Outlook: EUR/USD

EUR/USD clears the October high (1.0694) amid a smaller-than-expected rise in US Non-Farm Payrolls (NFP), and the exchange rate may attempt to retrace the decline from the September high (1.0882) as it extends the advance from the start of the month.

Euro Forecast: EUR/USD Clears October Range on Soft US NFP Report

EUR/USD trades back above the 50-Day SMA (1.0638) as it climbs to a fresh monthly high (1.0735), and the exchange rate may continue to carve a series of higher highs and lows as it seems to be no longer responding to the negative slope in the moving average.

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Euro Economic Calendar

 

FOREX.com Economic Calendar

However, data prints coming out of Europe may drag on EUR/USD if the Retail Sales report shows another contraction in household spending, and evidence of a slowing economy may produce headwinds for the Euro as it encourages the European Central Bank (ECB) to retain the current course for monetary policy.

Nevertheless, a stronger-than-expected Euro Are Retail Sales report may generate a bullish reaction in EUR/USD as it raises the ECB’s scope to further combat inflation, and recent price action raises the scope for a further advance in the exchange rate as extends the series of higher highs and lows from the start of the month.

With that said, the post-NFP advance in EUR/USD may gather pace as it breaks above the October range, and the exchange rate may attempt to retrace the decline from the September high (1.0882) as it no longer responds to the negative slope in the 50-Day SMA (1.0638).

EUR/USD Chart – Daily

Chart Prepared by David Song, Strategist; EUR/USD on TradingView

  • EUR/USD extends the recent series of higher highs and lows to register a fresh monthly high (1.0735), and it seems as though the exchange rate will no longer respond to the negative slope in the 50-Day SMA (1.0638) as it breaks out of the October range.
  • A breach above 1.0790 (61.8% Fibonacci retracement) may push EUR/YSD towards the 200-Day SMA (1.0807), with a break/close above the 1.0870 (23.6% Fibonacci extension) to 1.0880 (23.6% Fibonacci extension) region bringing the September high (1.0882) on the radar.
  • However, failure push above 1.0790 (61.8% Fibonacci retracement) may curb the bullish price series, with a move below the 1.0610 (38.2% Fibonacci retracement) to 1.0650 (78.6% Fibonacci retracement) raising the scope for a test of the October low (1.0448).

Additional Market Outlooks

GBP/USD Forecast: Former Support Zone Back in Focus

USD/JPY on Cusp of Testing 2022 High as BoJ Only Tweaks YCC

--- Written by David Song, Strategist

Follow on Twitter at @DavidJSong

 

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