After essentially stumbling in a choppy range since late July, the EUR/USD may be ready to become a speculative favorite again near term. As risk appetite shows a strong and consistent short term ability to generate positive momentum on global indices, the EUR/USD should be looked at as a way to express speculative buying sentiment within the forex markets.
Coupled with the rather dovish stance of the US Federal Reserve, heightened risk appetite in the stock markets and technical charts which show the EUR/USD challenging important resistance, speculators could not be blamed for buying the EUR/USD. If the forex pair is able to break the 1.17800 resistance level it appears the EUR/USD could find increased firepower upwards and challenge the 1.17900 juncture rather soon because it may find programmed buying get ignited as systems essentially try to take advantage of a gap which was created on the 6th of October downward.
Traders know there are no one way avenues in forex and certainly reversals lower can occur. However, the EUR/USD has incrementally risen in value since the 25th of September as it recovers from a bearish trend which erupted on the 1st of September when trading optimism ran into limited supply and risk was taken off the table. Not to say the EUR/USD will trade there anytime soon, but the value of the forex pair on the 1st of September was approximately 1.19970.
Short term speculative fever within the global indices should not be discounted as a correlating factor within the EUR/USD. Yes, there are many other complex formulas which can explain the current price level of the forex pair, but to not acknowledge the ability of risk sentiment to generate momentum would be rather foolish. The EUR/USD appears to be a buying opportunity within its current value range. Risk management needs to be used including conservative leverage and stop loss ratios to protect positions against the unexpected.
Buying the USD/EUR within a price range of 17.75000 to 17.7900 and pursuing upside action looks to be a worthwhile speculative position. Short term resistance technically appears to be vulnerable and if present market conditions continue to exhibit optimism on European and American stock exchanges the EUR/USD may provide solid trading near term.
EUR/USD Short Term Outlook:
Current Resistance: 1.17920
Current Support: 1.176000
High Target: 1.18250
Low Target: 1.17300
