EUR/USD: forecast for Oct. 30 - Nov. 3

The single currency made a spectacular decline versus the US dollar during the past week.

The European Central Bank extended its bond-buying well into next year. The regulator’s meeting was highly anticipated by market players. The euro had significantly strengthened in the months ahead of the event. Now traders have nothing like that to look forward to from the euro area anymore. The divergence between monetary policies of the Federal Reserve and the ECB is going to be negative for the pair.

In the coming days, European economic calendar is going to be rather light: pay attention to German retail sales and preliminary CPI on Monday, the region’s flash CPI for October and GDP for Q3. Liquidity will be lower on Wednesday because of bank holidays in France and Italy.

EUR/USD closed below 1.1650 on Thursday, confirming the Head and Shoulders pattern on the daily chart which marks reversal to the downside. The pair broke below the daily Ichimoku Cloud and 100-day MA – these levels will now act as resistance levels at 1.1677 and 1.1730. The decline may lead the euro to 1.1515, 1.1485 and 1.1420. A weekly close below 200-week MA at 1.1680 will seal the negative fate of the euro.     

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