Forex - EUR/USD weekly outlook: Oct 28 - Nov 1


Shutterstock photo - " The euro ended the week close to two-year highs against the dollar on Friday as the dollar remained under pressure on the view that the Federal Reserve is likely to maintain the current pace of its asset purchase program well into next year.

EUR/USD ended Friday's session at 1.3805, 0.02% higher for the day, after rising as high as 1.3833, the highest since November 2011 earlier. For the week, the pair gained 0.97%.

The pair is likely to find support at 1.3740, the low of October 23 and resistance at 1.3850.

The euro eased back from session highs against the dollar after a report showed that the German Ifo business confidence index unexpectedly fell for the first time in six months in October.

The report came one day after data on euro zone manufacturing and service sector activity indicated that the recovery in the region remains sluggish.

In the U.S., data on Friday showed that core durable goods orders unexpectedly fell 0.1% in September, the third consecutively decline.

A separate report showed that the University of Michigan U.S. consumer sentiment index was revised down to a 10-month low of 73.2 from a final reading of 77.5 in September.

The data cemented expectations that the Federal Reserve will delay plans to start tapering its stimulus program until at least the beginning of next year.

Data released earlier in the week showing that U.S. jobs growth had slowed in September, even before the start of the 16-day government shutdown, prompted investors to re-evaluate expectations over the timing of a possible reduction to the Fed's stimulus program.

The Fed surprised investors when it unexpectedly refrained from scaling back asset purchases at its policy setting meeting in September, saying it wanted more evidence of an economic recovery.

In the week ahead, investors will be focused on the outcome of Wednesday's Federal Reserve policy setting meeting. Euro zone reports on inflation and unemployment will also be closely watched.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, October 28

The U.S. is to produce reports on industrial production and the capacity utilization rate, as well as private sector data on pending home sales.

Tuesday, October 29

The euro zone is to release the results of the Gfk index of consumer climate, an important economic indicator.

The U.S. is to produce data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish data on producer price inflation and a report on consumer confidence, a leading economic indicator.

Wednesday, October 30

Germany is to release official data on the change in the number of people unemployed, a leading economic indicator, as well as preliminary data on consumer inflation.

Elsewhere in the euro zone, Spain is to publish a preliminary estimate of third quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.

The U.S. is to release the ADP report on nonfarm payrolls and official data on consumer price inflation.

Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. The statement is to be followed by a closely watched press conference with Chairman Ben Bernanke.

Thursday, October 31

The euro zone is to produce preliminary data on consumer inflation and a separate report on the unemployment rate, a leading indicator of economic health.

The U.S. is to release data on initial jobless claims and a report on manufacturing activity in the Chicago region.

Friday, November 1

The U.S. is to round up the week with a report from the Institute of Supply Management on manufacturing activity. offers an extensive set of professional tools for the financial markets.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Forex and Currencies

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