After a long descending wave from May to October 3rd, the Euro got back to life against the US counterpart on October 6. The Euro enjoyed this ride following the dovish sentiment expressed by the FED officials and the soft US retail sales figure. The bullish wave extended the price up to 1.2889 during the Wednesday session. The Thursday session opened at 1.2837 and made the daily closing at 1.2808.The price made the retracement form 1.2836, the 23.6 Fibonacci level.
As of this writing, the pair is being traded around 1.2823, with the bulls trying to retain the power. The trend line and 50 SMA are in favor of price to move up towards the 1.2958 level. It may then start the next descending wave towards 1.2586, as indicated by the trend line just ahead of the release of the US Michigan Consumer Sentiment Index.
Fundamental Analysis
The economic calendar contains the release of the US Reuters Consumer Sentiment Index and the Spain’s Trade Balance.
Reuter’s Consumer Sentiment Index
The Reuters Consumer Sentiment Index for this October is forecasted at 84.1 points. It means that economists and analysts are not optimistic this time as compared to the 84.6 points, the reading of September. Generally speaking, a high reading is considered positive for the US Dollar while a low reading is seen as bearish. The US dollar may show bearish sentiment if the actual outcome is even lower than the forecasted one.
Trade balance
Trade balance for this October remained negative at -2.77B Euro, more than that of the September which was -1.82B Euro. A negative reading reflects decreased competiveness of the economy and is therefore bearish for the euro.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT
