EUR/USD outlook, week October 22nd: Likes range-trading, wants to go higher, but is overbought
The latest EU summit has finished as expected with no major initiatives being announced. The perma-EUR-bear analysts will be howling as usual but traders will ignore them and get back to trading. The attached 4-hour chart shows how the market currently views the EUR; it wants to buy it but is unable to find enough momentum to break the range-trading mentality. It’s currently somewhat overbought so we can expect the usual Monday morning stop-loss hunt to find weak trailing stops below 1.3000. Any strong intraday rallies back towards 1.3100 are likely to run into heavy selling although with the EUR-crosses still looking quite well bid, deep dips will also be well supported. Throw any strong views out the window and stay in range-trading mode.