The euro was rather negative during most of the month of October, threatening the 1.15 handle. At this point, it will be interesting to see how this plays out, and I think the most important thing that this chart can offer is an idea as to what is going on with the US dollar overall. After all, the majority of the US Dollar Index is greatly influenced by the EUR/USD pair, so if for no other reason than to get an idea as to what the greenback might do this month, you need to be paying attention to this chart.
Having said all of that, if we do break down below the 1.15 handle, it is very likely that the euro will fall apart. At that point, I would anticipate that the euro could go looking towards the 1.14 handle, and then possibly the 1.12 level. This is a market that has recently broken through the 200-week EMA, bounced enough to test it again, and then got hammered as we closed out the month. The question now is whether or not we can continue to break down. I do think that the 1.15 level underneath is going to continue to offer support, and I think that if we break down below the 1.15 level on the daily candlestick, then we could see this market really break down. That would accelerate euro selling, and at that point in time I would probably be short of the euro against multiple currencies.
If we turn around and break above the top of the weekly candlestick that closed out the month of October, then it is likely that we could go looking towards 1.18 level. That is an area where you see the 50-week EMA hanging about, and that could offer a little bit of resistance. That is probably the high-end possibility for the month of November, just as 1.14 is probably the low-end. Keep an eye on the range of the last couple of candlesticks, because a breakout of that range should signify where we go next and give us an idea as to where the next hundred or so pips come from. Keep in mind that this pair does tend to be very choppy, so unless some type of change in attitude occurs globally, it will probably continue to be more noisy.
