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EUR/USD: what train are you on; 1.1800 or 1.0800?

FXStreet (Guatemala) - EUR/USD has been an impressive unit, last week taking on the 1.13 handle despite the concerns over the EZ and how the ECB may need to act accordingly by way of an extension to their QE programme.

This is an area that once the spotlight over the US economy is temporarily digested and switched to other relevant risk, (from Fed/rate hike and Nonfarm Payrolls shocker), the idea that the ECB is going to augment its QE plans could weigh heavily on the euro and all of a sudden we are looking at the 1.08 handle again and waving farewell to the passengers on the 1.1800 train.

This week is key for EUR/USD

While the FOMC minutes run the risk to the dollar bulls of portraying a dovish outlook with the backdrop of the recently dire Nonfarm Payrolls data, the ECB offers an account of the September Monetary Policy Meeting where you can look for additional insights into the ECB's interpretation of EM and financial market uncertainty at the time of their September meeting and additional clues for what those mean for euro area inflation.

EUR/USD levels

The recent gains to the 1.13 handle were indeed a knee jerk reaction to the Nonfarm Payrolls print. However, the move proves the market's appetite for the handle and the top of the cloud on continued bearish dollar plays. For now, the key support comes at the 55 DMA at 1.1160 while bears would be keen for a break below Sep lows and to penetrate 1.1080.

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