Community Forecasts for October 27-31: EUR/USD 1W Chart

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The Euro started the previous week in the mid of the 1.27 level against the Greenback, but was not able to sustain it and lost as much as 0.56%, closing the trading week at 1.2675, against traders' expectations of 1.2760. While currently markets are digesting results of the ECB stress test, which showed that 25 European banks failed it, with the reaction in currencies being modest, the fundamentals in the Eurozone remain Euro negative, particularly as the economic outlook of Germany, the Euro zone's powerhouse, darkens. Meanwhile, on another side of the Atlantics, the Fed is set to wind down its asset purchase programme this week, as the US economy continues to strengthen, while some concerns that cloud the growth prospects still persist. Fears that a slowdown in world economic growth could weigh on the US economic recovery have prompted investors to push back expectations for a lift in interest rates by the Federal Reserve to the second half of 2015. Thus, market participants will be scrutinizing the FOMC statement for further signs on how soon interest rates could start to increase. Another topical issue this week is Friday's report on Euro zone consumer price inflation, amid growing expectations that the ECB will have to deploy additional easing measures to prop up the faltering Euro area economy.
WallStreet6 is "rather bearish as the Eurozone is still undergoing problems and the US economy is picking up the pace. I think this week we will see more optimistic news from the US, especially that the holiday season (Thanksgiving, Halloween, Christmas) is coming up and consumer confidence should improve." The Dukascopy traders consensus forecast for EUR/USD stands at 1.2732, up from 1.2711 at the moment of writing, while the sentiment is evenly distributed between bulls and bears.

© Dukascopy Bank SA
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