- A more positive tone from EURUSD into the end of September, trying to reject the Head & Shoulders top pattern see earlier in the month, as we highlighted in our report last week.
- The US Dollar strength that was a key theme from mid-September faded into the end of the month, with a more negative USD theme resuming.
- This has been a reaction to a shift back towards a global “risk on” theme, with global equity indices rebounding and trying to base, to attempt to reject the September bear moves.
- As we look at the EURUSD forecast from a technical analysis perspective below, the bias is now to the upside into early October.
EURUSD day trade outlook: Bias higher
A small dip Wednesday below 1.1691 support to hold then at 1.1683, to retain positivity from Tuesday’s firm advance above 1.1687 and 1.1717/19 resistances to 1.1755, still rejecting bearish forces from the latter September sell-off (through key 1.1697/94 area, to confirm a bigger Head & Shoulders Top pattern and an intermediate-term bearish shift), to keep the bias higher for Thursday
Day trade setup
- We see an upside bias for 1.1755 and 1.1775; a break here aims for 1.1826 and maybe towards 1.1870.
- But below 1.1683 opens risk down to 1.1658 and possibly 1.1611.
EURUSD intermediate-term outlook
The late September push below the key 1.1697/94 area confirmed a bigger Head & Shoulders Top pattern and signalled an intermediate-term shift to a bear trend.
- Downside risks: We see an intermediate-term bear trend to aim for 1.1539, 1.1369 and maybe 1.1166.
- What changes this? Above 1.1917 shifts the intermediate-term bear trend to neutral; through 1.2011 to an intermediate-term bull trend.
