The euro continues to trade above $1.06 and investors are paying particular attention to the analysis of inflation trends in the Eurozone and their possible impact on monetary policy. Core inflation in the region fell to 4.5% in September, the lowest level in a year and below market expectations of 4.8%. However, the situation is heterogeneous: in Spain and Italy, inflation is accelerating, while in Germany it is slowing down to levels not seen since the beginning of the conflict in Ukraine.
The prevailing view at the moment is that the European Central Bank is unlikely to make further interest rate hikes for the rest of the year. However, high interest rates are expected to continue for a long time.
Eurozone inflation fell to 4.3% year-on-year in September 2023, reaching its lowest level since October 2021 and falling below market expectations of 4.5%, preliminary estimates showed. However, there is a variety of trends across Eurozone countries, making forecasting the movement of the euro more difficult.
EUR/USD Weekly Forecast October 2 — 6, 2023
The Euro/Dollar currency pair EUR/USD ends the trading week with a fall near the 1.0586 area. Moving averages indicate a bullish trend. Prices have broken through the area between the signal lines downwards, which indicates pressure from sellers of the European currency and a likely continuation of the fall from current levels. At the moment, we should expect an attempt to develop a rise in the pair’s quotes and a test of the resistance area near the level of 1.0675. Where is the expected rebound downwards and the continuation of the fall of the Euro Dollar. A potential downward target is the area below the level of 1.0055.
An additional signal in favor of a decline in the EUR/USD currency pair on Forex will be a test of the resistance line on the relative strength indicator (RSI), now the indicator values are pushing away from the support line, which suggests an imminent rise in price. The second signal will be a rebound from the lower border of the bullish channel, which was broken down by sellers. Cancellation of the option of falling quotes of the Euro/Dollar pair in the current trading week of October 2 — 6, 2023 will result in a strong growth and a breakdown of the level of 1.1155. This will indicate a breakdown of the resistance area and continued growth of the pair to the area above the level of 1.1375. With the breakdown of the support area and closing of quotes below the level of 1.0495.
EUR/USD Weekly Forecast October 2 — 6, 2023 suggests an attempt to develop a bullish correction and test the resistance area near the 1.0675 level. Where can we expect a price rebound downwards and a continuation of the pair’s fall on the Forex market to the area below the level of 1.0055. An additional signal in favor of a decline will be a test of the resistance line on the relative strength indicator (RSI). Cancellation of the Euro/Dollar fall option will be a strong growth and a breakdown of the level of 1.1155. In this case, we should expect the pair to continue to rise with a potential target at 1.1375.
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