EUR/USD: forecast for Sep 28-Oct 4
By Elizabeth Belugina
EUR/USD found support in the 1.1100/15 area. However, we do not see potential for any sizeable increase in the single currency: it seems that what we are seeing is nothing more than consolidation. On the upside, resistance is at 1.1300/25 and 1.1400.
The euro area will release a bunch of economic data this week. The region’s September inflation figures due on Wednesday will likely confirm the expectations of more easing from the European Central Bank limiting the euro’s potential to strengthen. Moreover, there will be many speeches from the US Federal Reserve’s officials: last week the representatives of American central bank did their best to show the market that the 2015 rate hike is still on the table. This week we may hear more of such talk. In addition, traders will surely focus on the release of US non-farm payrolls on Friday – the forecast is also positive for the greenback.
Risk aversion may still provide the euro with some support. Pay attention to Chinese manufacturing PMI on Thursday: investors are still extremely worried about China’s economic growth slowdown.
This week our strategy is to sell EUR/USD in the 1.1300/1.1400 area.