EUR/USD Intra-Day Technical Analysis - bullish breakout or bearish breakdown

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Sergey Golubev, 2015.10.06 13:39

Intraday Outlooks for EUR/USD by SEB (based on efxnews article)

EUR/USD: "Sellers keep responding. Thinned dynamic resistance keeps attracting responsive selling, but bears' initiative below 1.1150/05 is needed to confirm the ongoing bearish "Flag". Current intraday stretches are located at 1.1115 & 1.1285."

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Sergey Golubev, 2015.10.07 09:32

EUR and the global risk picture - Morgan Stanley (based on efxnews article)

Morgan Stanley is expecting for EUR/USd to be in breakdown below 1.1120/1.1100 level with 1.0850 as a next target with the possibility to break resistance levels in spike way in short-term situation for example:

• "A more risk positive environment appears to be developing for currencies markets which should continue to provide some short-term relief for commodity-related currencies and selective EM currencies."
  
• "However, the reaction in currency markets, so far, has been more muted than may have been expected. This may cause some questioning of the relationship between currencies and the risk environment."
  
• "We think it does, although it has been challenged on occasions recently. Indeed, monetary policy expectations are also having a strong influence on the EUR. Our FX drivers analysis suggests that front-end rates are having an equally strong positive relationship with the EUR as the negative risk relationship."
• "Hence, while we believe that the relationship between the EUR and the global risk picture remains intact, it has loosened and is now more prone to challenges and shift in policy expectations."
• "Overall, in the current environment we expect the EUR to put pressure on the lower end of the range, with a break below 1.1120/00 opening the way for a EURUSD decline towards 1.0850. But risk-off events should still generate EUR spikes higher."
  

As we see from the chart above - the price is on bearish with the ranging within the following support/resistance levels:

• 1.1459 resistance level located inside Ichimoku cloud in the ranging area of the chart, the next target in this case is 1.2655 'reversal' resistance level located in the primary bullish area of the chart, and
• 1.0924 support level located in the bearish area with 1.0807 as a next bearish target.

Thus, the most expected scenario is the following: the price will go down for breaking 1.0924 with 1.0807 as the next bearish target. As we are talking about the ranging market condition for this pair so we should expect some local downtrend as a bear market rally up to 1.1459 resistance in short-term basis for example.

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Sergey Golubev, 2015.10.08 09:16

FOMC Minutes expectations by Barclays Capital (based on efxnews article)

Barclays Capital made some expectation and forecasting concerning upcoming Federal Open Market Committee Minutes:

• "Since the September FOMC meeting, a number of FOMC participants have declared that the decision not to raise rates was “close”. We look to the minutes to provide some insight into this statement."
• "We also look to the minutes for context on the new sentence inserted into the September statement acknowledging risks from global economic and financial developments."
• "The minutes are likely to reveal the balance of sentiment between those members who preferred to look through these risks and those members who pushed to postpone any rate hike in an abundance of caution."
• "In addition, the minutes should reveal the number of members who are focused on economic activity abroad rather than just the financial market spillovers to the US."

Just to remind one trading rules for high impacted news event such as FOMC Minutes: more hawkish than expected = good for currency (for USD in our case).

From the technical points of view, the EUR/USD is moved on the border between the primary bearish and the primary bullish in intra-day H4 chart and on daily chart, and any good high impacted news event can move the price to any direction for example. Key support/resistance levels for EUR/USD H4 are the following: 1.1317 bullish resistance and 1.1134 bearish support. On the daily chart we may see 1.1579 key resistance and 1.0878 key support levels.

Once the price breaks key support/resistance levels at least in intra-day basis so it may be the good sign for the direction to be chosen by the price for the next week for example.