- The EUR/USD is trading near the 1.11680 mark as of this writing on the last day of September.
- The month of October is likely to be busy for EUR/USD day traders because volatility will remain part of the landscape.
- The upwards climb in the EUR/USD achieved during September did not come without a fight.
- However, the currency pair has certainly maintained its bullish streak which has been evident since late June of the year.
This coming Friday the U.S will issue its Non-Farm Employment Change data and Hourly Average Earnings. These numbers will serve as impetus for the EUR/USD because financial institutions are still unsure about the coming actions of the European Central Bank and Federal Reserve. Both central banks are expected to cut their interest rates further; the question is by how much in each of their respective announcements.
Test of 1.120000 Important Sign for EUR/USD Traders
The ability of the EUR/USD to climb to a high of nearly 1.12150 this past Wednesday was a bullish statement by large players. Yes, the EUR/USD did give back some of its gains, but the currency pair remains in sight of the 1.12000 level and this is certainly going to be a target that some are aiming for via positions that are able to be held longer. If the U.S jobs numbers are weaker this Friday, this would likely create more buying in the EUR/USD.
The ECB will release their Main Refinancing Rate decision on the 17th of October. European economic data remains lackluster, particularly from Germany. The interest rate cut by the ECB in September was only 0.25% which was viewed as too cautious by many financial institutions who wanted to see more aggressive dovish action. However, there is reason to believe because the Fed cut by 0.50% on the 18th of September, this may open the door for a larger rate cut from the ECB in mid-October with a 0.50% cut. Yet nothing is certain.
Gains in the EUR/USD Made in Late September
The gains made the past couple of weeks in the EUR/USD have correlated to the broad Forex market, but the movement higher has been frequently been challenged by reversals lower. This is because of the lack of solid clarity from the Fed and ECB. Yet, financial institutions seem to still think both central banks will remain dovish over the mid-term and this has certainly help create the upwards momentum which has brought long-term values into sight.
- The current price realm of the EUR/USD is near values seen in July 2023. However a reversal lower occurred after the highs of July 2023, but this is unlikely to happen to the EUR/USD in October, circumstances are different.
- There will definitely be lower reversal as part of the normal Forex landscape in the days and weeks ahead, but behavioral sentiment is displaying USD centric weakness and this is unlikely to disappear soon.
- The approaching U.S election in early November will create caution, but most eyes will be on U.S economic data and the ECB rate decision on the 17th of October.
- The Fed will announce its FOMC Statement on the 7th of November.
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EUR/USD Outlook for October 2024:
Speculative price range for EUR/USD is 1.10800 to 1.13200
Bullish traders of the EUR/USD cannot take positions blindly. Until the U.S jobs numbers are published this Friday things may be choppy in the currency pair. The 1.12000 mark will be an interesting barometer in the coming days, if it is penetrated higher before the U.S jobs data this would be a bullish signal from financial institutions, but it would also mean the Non-Farm Employment Change will have to come in weaker than expected to sustain higher terrain afterwards.
The next big question for EUR/USD players in October is how much the ECB will cut by, they should cut by 0.50% but U.S and European data will have to remain lackluster. Central banks are still worried about sudden inflation developing, but the lower Crude Oil costs may be a sign that this is not going to happen quite yet. If the EUR/USD sustains price action above the 1.12000 level comfortably, there is reason to suspect some additional price velocity could be seen in the currency pair. Day traders should use risk management and not get overly ambitious.
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