Since the beginning of this week, the greenback has been showing negative dynamics against the basket of world currencies. The dollar index (#DX) reached monthly lows. The Fed, as expected, lowered its key interest rate range by 25 basis points to 1.50-1.75%. The Central Bank is concerned about the uncertain economic situation in the country. The regulator said that further adjustment of monetary policy would depend on future economic reports.
Currently, investors have taken a wait-and-see attitude before the publication of the US labor market report for October on Friday, November 01. These statistics may affect the Fed's views on further monetary policy adjustments.
Recent reports from the US were ambiguous. Preliminary data from ADP indicated an increase in the number of people employed in the nonfarm sector of the country by 125K, which is higher than the forecasted value of 120K. At the same time, the consumer confidence index slowed down to 125.9 compared to market expectations at 128.0. Over the past week, initial jobless claims have increased from 213K to 218K.
Experts expect a deterioration in key indicators of the labor market: the number of people employed in the US nonfarm sector will slow down from 136K to 89K; the growth of the average hourly earnings will be 0.3% (m/m) in comparison to the previous value of 0.4% (m/m); the unemployment rate will increase to 3.6%. We recommend paying attention to the difference between the actual and forecasted values of the indicators.
Let’s consider the current technical pattern on the EUR/USD currency pair
- Support Levels: 1.11200, 1.10750, 1.10400
- Resistance Levels: 1.11700, 1.12000, 1.12500
- - The price has fixed above 50 MA and 100 MA;
- - The MACD histogram is in the positive zone and continues to rise.
On the EUR/USD currency pair, the bullish sentiment prevails. The trading instrument reached monthly highs. At the moment, the EUR/USD quotes are consolidating near the key resistance level of 1.11700. The 1.11200 mark is a "mirror" support. The euro has the potential for further recovery. Indicators signal the power of buyers:
We recommend opening positions from key levels.
If statistics from the US turn out to be weak, we expect further growth of the EUR/USD quotes. The movement is tending to 1.12200-1.12600.
An alternative could be a decrease in the EUR/USD currency pair to 1.10800-1.10500.
Confirmations and market entry points should be looked for on lower timeframes. When tracking positions, we recommend using a trailing stop.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.Open Account