Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

October rally in EUR/USD exchange rate may stretch further

The October rally in EUR/USD could extend further, with the technical picture positive and IG Client Sentiment data sending out a bullish trading signal.

EUR/USD exchange rate Source: Bloomberg

EUR/USD price, news and analysis:

  • After the long decline in EUR/USD that began in late September last year, the near-term picture for the pair is looking brighter.
  • The technical picture is more positive and IG client sentiment data is sending out a bullish trading signal.

Technicals brighter for EUR/USD price

There is no end in sight yet for the long-term downward trend in EUR/USD that began in late September last year. However, the current month has been a good one so far for the currency pair and its October rally could yet stretch higher.

As the chart below shows, the price has risen already this month from below 1.090 to around the 1.100 level. To continue its rally it would need to make a decisive break above the 20-day moving average, currently at 1.0982, and then above the psychologically important resistance at 1.100. However, if that were to happen, there would be little further resistance until the highs between 1.1020 and 1.1026 reached on September 23 and a break above there would bring the 50-day moving average at 1.1036 into view.

EUR/USD price chart, daily timeframe (July 9 – October 8, 2019)

EUR/USD price chart Source: IG charts
EUR/USD price chart Source: IG charts

Bullish sentiment signal for EUR/USD

At the same, figures showing the positioning of retail traders using IG are sending out a bullish trading signal for EUR/USD. This IG client sentiment data show 53.6% of traders are net-long, with the ratio of traders long to short at 1.16 to one. The number of traders net-long is 3.6% lower than on Monday and 30.7% lower from last week, while the number of traders net-short is 13.7% higher than on Monday and 74.3% higher from last week.

At DailyFX, we typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests the EUR/USD price may continue to fall. Yet traders are less net-long than on Monday and compared with last week. Recent changes in sentiment suggest that October’s rally in the EUR/USD price trend may continue despite the fact traders remain net-long.

Client sentiment for currency pairs Source: IG
Client sentiment for currency pairs Source: IG

Fundamental problems

From a fundamental perspective, however, the picture looks less bright. The continuing US-China trade dispute, concerns about a possible Turkish offensive on the Kurdish-controlled north-east of Syria and the moves in Washington to impeach US President Donald Trump could all boost demand for USD, which is seen widely as a haven for investors seeking assets regarded as less risky than others such as stocks.

However, given that these concerns have been around for a while now, it could be that they are already priced in to EUR/USD, potentially supporting the case for a rally.

What is forex and how does it work?


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.