Published data of business activity in the regions of the euro area have given mixed results. In general, indices went better than expected, which allowed to change the mood of the market in the hope of a good start of the European economy in the 4th quarter. Composite (combined) index for October came in at 52.2 versus 52.0 in September, although the market was tuned to decline.
Positive economic data rekindled investor demand for risky assets and weakened their interest in safe-haven assets. As demonstrated by the new data, manufacturing activity in China and Europe in October increased, as well as the economic activity in the United States. When prospects improve, investors tend to redirect their funds in equities and other investments that benefit from economic growth, while reducing positions in safe-haven assets.
EUR / USD: technical analysis and forecast of the euro dollar 24/10/2014
Fig. 1 The daily chart
Euro dollar continues to remain in long-term downward trend channel in the near future may continue to decline, the purpose of which is to attempt to break below the low of 1.2500 and access to the support line of the channel. More substantial reduction may be difficult.