Forecast for EUR/USD on October 27, 2023
October 27, 2023 5:25 amVideo
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EUR/USD
Yesterday, the euro lost 42 pips, almost reaching the descending green price channel line, and closed the day above the 1.0552 level, ending with a 5-pip decline. The results of the European Central Bank meeting were generally within the market’s expectations: the interest rate remained unchanged, and the economic outlook was pessimistic. At the same time, the U.S. GDP increased at a 4.9% annualized rate last quarter, against an expected 4.3%, while durable goods orders for September increased by 4.7% versus the expected 1.7%. It was surprising to see the euro rebounding upwards. Take note that the euro did not fall despite the fact that the S&P 500 was down by 1.18%, oil prices dipped 2.03% (WTI), while bond yields also dropped.
We believe that strategic players did not allow the dollar to strengthen (the dollar index rose by 0.09%) in anticipation of the Federal Reserve meeting. The greenback is expected to weaken in the medium-term while the stock market is seen to correct higher.
Given these positions, the euro must consolidate above the support level at 1.0552. This would require a modest close above this mark. The Marlin oscillator is in the bullish territory and it seems that it intends to reverse to the upside.
On the 4-hour chart, the price has already consolidated above 1.0552. However, it is noticeably below the MACD indicator line and the balance line, and the Marlin itself is still in the bearish territory. Therefore, in order to prepare for the reversal, the price must stay above the support level. Since the Marlin oscillator is a leading indicator, it will be the first one to signal a transition to the bullish territory in case the euro actually intends to rise. Today, we will observe.
The material has been provided by InstaForex Company – www.instaforex.com
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