EUR/USD Price Analysis – Nov 11, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair showed no signs of recovery and remained under pressure around the 1.0688 level, hitting an intra-day low of 1.0678. However, the pair edged lower as the election of Republican Donald Trump as US President boosted the greenback.
Moreover, the shared currency (EUR) lost further momentum as Trump's policies were expected to impact the Eurozone’s exports negatively. On a brighter note, the risk-on market sentiment and the Federal Reserve's potential rate cut could limit further gains in the US Dollar, which could be beneficial for the EUR/USD pair.
US Dollar Strengthens Amid Trump’s Policies and Positive Economic Data, Pressuring EUR/USD
On the US front, the broad-based US dollar has been flashing green as the election of Republican Donald Trump has strengthened the USD’s long-term outlook. However, the upticks in the dollar were triggered right after the Trump's promises to raise import tariffs and cut taxes are expected to increase inflation and national debt. However, the Reuters poll showed that most people believe Trump's policies will push the US national debt higher.
Investors are closely watching speeches from Federal Reserve (Fed) officials this week to get clues about potential rate cuts in December. According to the CME FedWatch tool, there is a 65% chance the Fed will cut interest rates by 25 basis points to 4.25%-4.50%. This would mark the second consecutive rate cut.
Investors are also focused on the US Consumer Price Index (CPI) data for October, to be released on Thursday, which could influence the rate outlook, though officials expect inflation to continue slowing.
On the economic data front, the University of Michigan Consumer Sentiment Index rose to 73.0 in November, up from 70.5 in October, beating expectations of 71.0. Meanwhile, US Initial Jobless Claims rose to 221,000 for the week ending November 1, in line with estimates, and up from the previous week’s revised total of 218,000. These figures show a stable labor market, but inflation and interest rate expectations remain in focus for future US Dollar strength.
Hence, the strengthening US Dollar, driven by Trump’s policies and upbeat US economic data, puts pressure on the EUR/USD pair.
EUR/USD – Technical Analysis
The euro is trading at $1.0712 against the U.S. dollar, marking a slight gain of 0.06% in the last session. The currency pair is consolidating within a narrow range as it faces strong resistance levels while maintaining immediate support. The pivot point at $1.0728 serves as a crucial reference level, reflecting current market sentiment.
Immediate resistance is found at $1.0752, which closely aligns with the 50-day Exponential Moving Average (EMA) at $1.0759. This level acts as a critical threshold for any upside movement. A sustained breach above this resistance could signal further gains, with the next resistance levels situated at $1.0788 and $1.0815.
On the downside, immediate support is positioned at $1.0687, with additional support levels at $1.0655 and $1.0622. If the euro fails to hold these levels, bearish pressure may intensify, targeting further declines toward the lower support zones.
Technical indicators reflect a cautiously bearish outlook. The Relative Strength Index (RSI) is currently at 36, indicating that the euro is approaching oversold territory, though it remains above critical support levels. The 50 EMA at $1.0759 reinforces the resistance, and any failure to break above this level could maintain the bearish trend.
For traders, a potential short position below $1.0811 might be attractive, with a target at $1.0745 and a stop-loss set just above $1.0855. A breakdown below the 50 EMA would reinforce the downtrend.
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