EUR/USD Forecast November 3, 2017, Technical Analysis

The EUR/USD pair has continued to grind to the upside, reaching towards the 1.17 level above. That was the neckline from the head and shoulders from the daily timeframe though, so I think it is likely that the sellers will return somewhere near there. However, we have the jobs report coming out during the day today, and that of course will cause quite a bit of noise in this market. I believe that if there’s anything dollar positive coming out, we will confirm the head and shoulders and go much lower. From a technical standpoint, the move should go down to the 1.13 level based upon the measurement of the head and shoulders pattern. That doesn’t mean that it will happen overnight, and it certainly may take some time to get down there. I think there are a lot of concerns about the ECB after Mario Draghi was much more dovish than anticipated.
Federal Reserve looks likely to raise interest rates longer-term, and therefore I think it makes sense that the US dollar gets a bit of a boost, least over the next several handles. It’ll be interesting to see what happens at the 1.13 level, because that is the technical move fulfilling itself. Can we turn around at that level? I think it is possible, but we need to wait to see what happens next. If we were to break above the 1.1750 level, then I would consider the head and shoulders pattern negated, and that should send the market back towards the 1.20 level, perhaps helped by the announcement during the session. Either way, this is going to be a very volatile pair, as it typically is on a nonfarm payroll Friday, and I’ll see the reason why this would be any different today.