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The EUR/USD has begun the 4th quarter with weekly gains, advancing around 280 pips from Monday's low at 1.2800 to reach the highest level since September 19 at 1.3070 on Friday. The ultimate boost came from the surprising US September report which pushed the jobless rate down to 7.8% and the EUR/USD break above 1.3000. But the market is asking how far could it go?

The Euro advanced well this week with four of five positive days. It was a key week for the Euro and the dollar on the back of the ECB rate decision and Draghi's speech in Europe as well as FOMC minutes and the employment report in the United States. As Mauricio Carrillo from commented in his recent "To bull or not to bull" research, "the employment report in the US was overall positive on Friday. NFP rises 114K in September vs 113K consensus. There was a big revision in August data to 142K from 96K previously reported; Labor force improves; Unemployment down to its lowest level since January 2009."

While the near-term outlook remains bullish, the pair could lack momentum to regain the 1.3100 mark just yet as indicators are reaching overbought levels in 1- and 4-hour charts. However, should the EUR/USD break above 1.3100, the 1.3170 September double top will the next bullish target.

The TD securities team sees the near-term bias for EUR/USD as "likely to remain stronger." In the short term, the charts "suggest steady accumulation of EUR on dips through late September and early October, forcing the EUR out of the topside of the bear channel that guided the market down from the high 1.31 zone." And that looks "like a bull flag break-out (550-600 ticks of upside potential implied)."

The Euro's momentum against the Dollar is bullish in several time frames which suggests more upside windows and limited downside risks in the near futures. "A retest of the 1.3150/75 congestion range (at least) seems a likely consequence of technical developments from here," adds TD. "Over the coming week, look for better EUR support on dips and for shorts to be steadily squeezed once again."

But UBS' analysts see EUR/USD upside potential limited by 1.32. "Risk taking lifted the euro as usual. Some investors even questioned how much sense QE makes after a positive surprise in the employment sector," the UBS analyst team comments. "Also supportive for the euro were talks about an agreement to capitalize Greek banks."

"We still believe the upside in EURUSD is limited towards 1.32," says UBS. "Only a big deal within the Eurozone and a rebound of GDP should convince fundamental investors to buy the euro above 1.32."

Just a remark, recent CFTC data has suggested that speculators are holding net short USD positions for first time in a year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.