EUR/USD Forecast October 6, 2017, Technical Analysis

The EUR/USD pair initially went sideways on Thursday, but then rallied a bit. However, we found enough resistance near the 1.1780 level to turn around and fall significantly. We are testing the 1.17 level as I write this, which is an area that we should see a certain amount of support at. If we break down below there, the market should then go looking towards the 1.15 level afterwards. That is a level where we saw a major breakout, and a breakout above that level suggested that we were going to go to the 1.25 level. I think that’s what happens given enough time, but in the short term it’s obvious that we have a lot of selling pressure. The currency markets continue to be very choppy, and of course with the jobs number coming out of America today, this will be a place where we see a lot of noise.
In fact, I would not be averse to standing on the sidelines as we await some type of clarity, because quite frankly we probably won’t have it right away. Given enough time though, I think the first target will be the 1.18 level, followed by the 1.20 level after that. The market continues to be noisy, but I think overall the trading community wants to be a “risk on” market, and that typically favors the EUR in general. Pay attention to the DAX, it shows faith in Germany, and that of course can be reflected in the currency markets as well. Expect choppiness, but I still believe that the longer-term attitude of the markets dictate that people will be looking for value on these pullbacks, and that the Euro continues to be a market that pounds back and forth, with an eventual bullish flavor.