EUR/USD Forecast October 13, 2017, Technical Analysis

The EUR/USD pair initially tried to rally on Thursday, but rolled over as we approached the 1.1880 level. The market then pulls back to the 1.1850 level, and after breaking above the 1.18 level is a very bullish sign. That’s an area that should be supportive as well, and I believe that the longer-term uptrend continues as we will then go looking towards the 1.20 level above. I think that resistance barrier extends to the 1.21 handle, but eventually we will clear that area and go to the 1.25 level which is my longer-term target. We had recently broken out of a major consolidation area over the last several years, and it measured for a move to the 1.25 handle above. I think that it’s only a matter of time before we get there but it’s going to take a lot of work to do that.
Markets continue to be noisy, but quite frankly I think we continue to favor the Euro overall as the US dollar has been struggling, and of course this pair tends to rally when we have a stronger market. The market should continue to look at pullbacks as buying opportunities, and I believe there’s a bit of a “floor” near the 1.15 handle underneath. That being broken to the downside would be catastrophic for the Euro, but I think that the market is very unlikely to go looking for that level. I recognize that it will take several attempts to break above the 1.20 region, but once we do I think it will be the proverbial “beach ball underwater” type of trade, as it will be like holding a beach ball underwater and then letting ago, it should spring to the upside rather violently. This will be especially true if the ECB seems remotely hawkish.