FX.co ★ EUR/USD. Forecast for October 21, 2013

Now when the decision of the US national debt was postponed until February, the investors are paying much attention to QE3 cut. The question is not as simple as it could be regarded. The head of the Kansas City Fed Esther George said that the Fed should stick to the plan on QE3 trimming. On the contrary, the majority of the members stick to the opposite point of view. However, if the Republicans make the situation interminable, the decision of the economic problems may be taken from the military point of view, i.e. aggression towards Syria. In its term, the Administration will try to exaggerate the outcomes of the government shutdown by means of the lowered statistical data to achieve the other increase of the national debt ceiling or its cancellation. Thus, in the fourth quarter, the statistical services both governmental and independent will be highly agenda-driven.

The Fed may choose any tactics in the budgetary and political opposition; to play to Barack Obama and reduce the bond-buying program, to the budget ceiling to be cancelled and to take the burden on their balance and continue QE3 to continue financing budget deficit without political prerequisites, i.e. to show the neutrality.

Today at 18:00 data on US Existing Home Sales in the US in September is issued; forecast 5.31 million vs. 5.48 million in August.

From the technical point of view, when the testing level 1.3646 is broken, the first target 1.3607 opens, the second target is 1.3570, the high of September 19. In the medium term, the decline is possible after the support levels on the H4, red and green lines (1.3518) are broken.