Mid-week Market Analysis 2

The market's increase volatility have shown price movements on both directions of the market place. As money flows between equities, asset class precious metals market, and the foreign currencies among institutional players. This has not been favorable with the US Dollar. As the US dollar index have now registered 75.75 low as of the Asian trading sessions towards the opening of European trading. Our opening market outlook dated the 24th of October have stated that the momentum would readily build-up as a probable break below the 75.85-76.05 range would cause prices for the EURUSD to make a follow-through heading higher when it has broken the intermediate resistance of 1.3880. Currently touching the 1.4014 high and is at the higher levels as of this writing. 

EURUSD WEEKLKY CHART
As of 10.27

Apparently, as the market prices for the EURUSD and the EURGBP cross rates would now move higher throughout the coming sessions towards the American trading where we do expect a continuation of increase market price action and volatility to be aggressive. Daily price extensions and trading range for the EURUSD would be between the current levels with 1.4080-1.4110 range and as for the EURGBP cross would be seen at the extension range levels of 0.8750-0.8870 respectively. 

These current two days of trading activity to follow will culminate higher as the upcoming report this Friday would also be the catalyst in the final direction for the US Dollar moving forward. However, a word of caution should be properly exercised from hereunto. As these are the typical market conditions where 'bait & trade' are done amongst the bigger institutional / hedge funds prior to closing of the week & turnover positions of the month.  

In essence, watch for the market sentiments and volumes from the European trading hours that may trade the major pairs to their extreme extensions, then spill-over towards the American trading session before the major report on Friday would be release. By then the total opposite would get unsuspecting main street investors what hit them only after the market has moved opposite of the current market price swing.

Notable, compare the price behavior between the USD, Gold prices and oil as their correlation may also weigh for the USDX to move towards the end and opening of the new month by next week.