EUR/USD Price Analysis – Nov 22, 2024
Daily Price Outlook
During European trading session on Friday, the EUR/USD managed to recover some of its losses after hitting a fresh two-year low around 1.0330. However, the outlook for the pair remains bearish.
This is due to the disappointing preliminary HCOB Eurozone Purchasing Managers Index (PMI) for November, which showed a surprising contraction in business activity. Meanwhile, the US Dollar continues its bullish run, pushing the US Dollar Index to nearly 108.00, intensifying the selling pressure on EUR/USD.
Weak Eurozone Data and Growing Economic Concerns Heighten Expectations for ECB Rate Cut, Weighing on EUR/USD
On the data front, the Eurozone's Composite PMI fell to 48.1, much lower than the expected 50.0, which signals a contraction in economic activity. A PMI below 50.0 indicates that the economy is shrinking.
The decline was mainly driven by a weaker-than-expected Services PMI, which dropped to 49.2, far below the forecast of 51.8. This marks the first time since January that the service sector has contracted. The Manufacturing PMI also continued to decline, falling to 45.2, worse than both expectations and the previous reading of 46.0.
Meanwhile, the slowdown in business activity has raised concerns among European Central Bank (ECB) officials. They are already worried about weak growth and potential risks, especially with the possibility of a trade war with the United States.
ECB Chief Economist Philip Lane warned that a global trade war, triggered by President-elect Donald Trump’s potential tariffs, could cause significant damage to the global economy. He stressed that trade disruptions would result in major output losses.
As a result of the weak data, traders now believe there is a greater than 50% chance that the ECB will cut its Deposit Facility Rate by 50 basis points (bps) to 2.5%. Before the PMI data was released, the chances of such a large rate cut were less than 20%. This shows growing expectations for the ECB to take action to support the economy.
Therefore, the weak Eurozone data and growing concerns about economic risks increase the likelihood of an ECB rate cut, which could weaken the euro further. As a result, EUR/USD may face additional downward pressure, with the US dollar strengthening in comparison.
US Dollar Strengthens on Optimistic Economic Outlook and Eased Fed Rate Cut Expectations
On the US front, the broad-based US dollar is gaining strength, with EUR/USD facing heavy selling pressure. The US Dollar Index is nearing a two-year high, fueled by expectations that the Federal Reserve (Fed) will cut interest rates less than previously thought.
Investors now expect the US economy to grow faster, particularly with President-elect Donald Trump's economic plans, which include cutting taxes and raising import tariffs, especially on countries like the Eurozone and China.
Trump’s plans to raise tariffs and cut taxes are expected to boost business investment, demand for labor, and domestic goods. This could lead to higher inflation, which would make the Fed more cautious about cutting interest rates too quickly.
As a result, market expectations for rate cuts have eased. The chance of a 25-basis point reduction in December has dropped to 56% from 70% just a month ago.
Looking ahead, investors are waiting for the US S&P Global PMI data for November, which will be released at 14:45 GMT. The report is expected to show stronger business activity, with growth in both the manufacturing and service sectors, which could further support the dollar’s bullish momentum.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.04841, marking a modest gain of 0.10%, as the pair consolidates near critical support levels. Immediate resistance lies at $1.05129, with higher targets at $1.05767 and $1.06083. On the downside, immediate support is set at $1.04516, followed by $1.04300 and $1.03999, signaling the potential for bearish pressure if the pair breaches key levels.
The pivot point at $1.05548 serves as a key marker for directional bias. Currently, the pair trades below the 50-day EMA at $1.05494, indicating a bearish trend in the short term. The RSI at 38 suggests weak momentum, leaning toward oversold conditions but not yet signaling a reversal.
Traders are advised to consider selling below $1.05122, targeting $1.04501 with a stop-loss at $1.05629. A break below $1.04516 could lead to further declines toward $1.04300, while a recovery above $1.05129 would challenge bearish dominance and open the path to $1.05767.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias: Trading below the pivot point and 50-day EMA at $1.05494 reinforces downside risks.
- Support Levels: Immediate support at $1.04516, with potential declines toward $1.04300 if breached.
- Weak Momentum: RSI at 38 indicates subdued buying interest, leaning toward oversold territory.
EUR/USD is trading at $1.04841, marking a modest gain of 0.10%, as the pair consolidates near critical support levels. Immediate resistance lies at $1.05129, with higher targets at $1.05767 and $1.06083. On the downside, immediate support is set at $1.04516, followed by $1.04300 and $1.03999, signaling the potential for bearish pressure if the pair breaches key levels.
The pivot point at $1.05548 serves as a key marker for directional bias. Currently, the pair trades below the 50-day EMA at $1.05494, indicating a bearish trend in the short term. The RSI at 38 suggests weak momentum, leaning toward oversold conditions but not yet signaling a reversal.
Traders are advised to consider selling below $1.05122, targeting $1.04501 with a stop-loss at $1.05629. A break below $1.04516 could lead to further declines toward $1.04300, while a recovery above $1.05129 would challenge bearish dominance and open the path to $1.05767.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.05122
Take Profit – 1.04501
Stop Loss – 1.05629
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$621/ -$507
Profit & Loss Per Mini Lot = +$62/ -$50
EUR/USD Price Analysis – Nov 20, 2024
Daily Price Outlook
During Wednesday’s European session, the EUR/USD currency pair continued its downward trend, dropping to around 1.0555 level. However, the pair weakens as the US dollar gained strength, supported by expectations of fewer interest rate cuts from the Federal Reserve (Fed) in its ongoing policy-easing cycle.
Moreover, the EUR/USD losses accelerated further amid growing negative sentiment towards the Eurozone, driven by ongoing geopolitical tensions, a weakening economic outlook, and political uncertainty in Germany.
US Dollar Strengthens Amid Slower Fed Rate Cuts and Geopolitical Tensions, Pressuring EUR/USD
On the US front, the broad-based US dollar strengthened as expectations grow that the Federal Reserve (Fed) will cut interest rates more slowly. Experts predict a rebound in US inflation and faster economic growth, especially with President-elect Donald Trump's victory.
Trump’s plans to raise import tariffs by 10% and lower taxes could limit the Fed’s ability to make deeper rate cuts. For December, the Fed is likely to cut rates by 25 basis points, bringing them to the 4.25%-4.50% range, though this decision is still uncertain, according to analysts at Deutsche Bank.
Moreover, the Greenback gained further traction after Russian President Putin's approval to revise nuclear doctrine in response to the US's approval of long-range missiles for Ukraine. This boosted demand for the USD as a safe haven. However, safe-haven demand weakened after Russian Foreign Minister Sergei Lavrov stated that Russia would avoid nuclear war if possible.
Therefore, the bullish US Dollar, driven by expectations of slower Fed rate cuts and geopolitical tensions, puts pressure on the EUR/USD pair. As the USD gains, the EUR/USD continues to weaken, reflecting negative sentiment towards the Eurozone and broader market uncertainty.
EUR/USD Struggles Amid Weak Eurozone Outlook and ECB Policy Focus on Growth
On the EUR front, the losses in the EUR/USD pair bolstered further by negative sentiment surrounding the Eurozone weighed on the currency. However, the geopolitical tensions, weak economic outlook, and uncertainty in German politics contributed to the Euro’s struggle. European Central Bank (ECB) officials are more focused on supporting growth than controlling inflation.
ECB policymaker Fabio Panetta stated that since inflation is close to the target and domestic demand is weak, there is no need for strict monetary policies. He also warned that if the economy doesn't improve, inflation could stay below the ECB’s target.
Looking ahead, the ECB is expected to cut its Deposit Facility Rate by 25 basis points to 3% in its December meeting. This would be the fourth interest rate cut this year and the third consecutive one.
In addition, recent data showed that Eurozone wage growth, measured by Negotiated Wage Rates, increased to 5.42% in Q3, up from 3.54% in the previous quarter.
This wage growth could help boost consumer spending, but it also highlights ongoing challenges in the Eurozone economy. As a result, the EUR continues to face pressure, limiting its recovery against the USD.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05874, down 0.06%, with bearish sentiment as the pair holds below the pivot point at $1.06083. Immediate resistance is positioned at $1.06367, with further resistance levels at $1.06620 and $1.06874, marking potential reversal zones for a bullish recovery.
The 50-day EMA at $1.05623 aligns closely with immediate support at $1.05472, forming a key short-term floor. Deeper support levels include $1.05176 and $1.04867, providing targets for sellers if the bearish trend persists.
The Relative Strength Index (RSI) is at 52, reflecting neutral momentum with no clear overbought or oversold signals. The pair is trading above the 50-day EMA, suggesting slight underlying bullish strength, but failure to break above $1.06083 could trigger a retreat.
Traders should watch the $1.05793 pivot closely—staying above this level favors bullish strategies, while a sustained break below $1.05472 would open the door for deeper corrections.
For now, a buy position above $1.05793 is recommended, targeting $1.06254 with a stop loss at $1.05565. However, sustained resistance at $1.06083 could limit gains, keeping the pair in a tight trading range.
EUR/USD remains range-bound below $1.06083, with opportunities for buying above $1.05793. However, failure to clear resistance levels could prompt further selling toward $1.05176.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: Key resistance at $1.06083, $1.06367, and $1.06620. A breakout above these levels is needed for bullish momentum.
- Support Levels: Immediate support lies at $1.05472, with further levels at $1.05176 and $1.04867 to watch for deeper downside risks.
- Technical Indicators: RSI at 52 signals neutral momentum, while the 50-day EMA at $1.05623 acts as a dynamic support zone.
EUR/USD is trading at $1.05874, down 0.06%, with bearish sentiment as the pair holds below the pivot point at $1.06083. Immediate resistance is positioned at $1.06367, with further resistance levels at $1.06620 and $1.06874, marking potential reversal zones for a bullish recovery.
The 50-day EMA at $1.05623 aligns closely with immediate support at $1.05472, forming a key short-term floor. Deeper support levels include $1.05176 and $1.04867, providing targets for sellers if the bearish trend persists.
The Relative Strength Index (RSI) is at 52, reflecting neutral momentum with no clear overbought or oversold signals. The pair is trading above the 50-day EMA, suggesting slight underlying bullish strength, but failure to break above $1.06083 could trigger a retreat.
Traders should watch the $1.05793 pivot closely—staying above this level favors bullish strategies, while a sustained break below $1.05472 would open the door for deeper corrections.
For now, a buy position above $1.05793 is recommended, targeting $1.06254 with a stop loss at $1.05565. However, sustained resistance at $1.06083 could limit gains, keeping the pair in a tight trading range.
EUR/USD remains range-bound below $1.06083, with opportunities for buying above $1.05793. However, failure to clear resistance levels could prompt further selling toward $1.05176.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.05793
Take Profit – 1.06254
Stop Loss – 1.05565
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$461/ -$228
Profit & Loss Per Mini Lot = +$46/ -$22
EUR/USD Price Analysis – Nov 18, 2024
Daily Price Outlook
EUR/USD Finds stability Ahead of ECB Lagarde's speech
EUR/USD Remains Above 1.0500
The ECB and Fed policy decisions are still unclear, hence the EUR/USD pair is trading roughly above the important support level of 1.0500. The recent surge in the US dollar has slowed after reaching an annual high, giving the euro some leeway. A push above 107.00 is sought by the US Dollar Index which compares the US dollar to other major currencies.
Trump's Policies Increase Uncertainty in the Market
Investors are keeping a careful eye on how Donald Trump's trade proposals might affect international markets. The USD may gain more strength, according to analysts, as Trump pursues an aggressive trade policy and more tariffs. The US economy has performed well in comparison to its counterparts, and Capital Economics economists now predict a 5% increase in the value of the dollar by the end of 2025.
Highlights of ECB Lagarde's Speech
This week's major event for traders is ECB President Christine Lagarde's address in Paris. Lagarde is going to discuss the possible effects of Trump's initiatives on the economy of the Eurozone. The euro is being held in check by uncertainty as analysts cannot agree on whether the ECB would lower rates by 25 or 50 basis points.
Fears of a Trade War between the US and the Eurozone
There are now more worries of a trade war among the US and the Eurozone. Trump has previously threatened punitive action against the eurozone for not buying enough US exports. Tensions have been exacerbated by recent comments made by Stephen Moore, Trump's economic advisor, indicating that the US is less interested in trade agreements with countries who support the EU.
Fed Continues to Be Wary
Jerome Powell, the chair of the Fed, recently stressed the need of monetary policy being prudent. While inflation is gradually approaching the Fed's 2% target, Powell stated during his speech in Dallas that the US economy does not demonstrate a need for rate decreases. Markets now estimate a 60% possibility of a quarter-point rate decrease in December, which is lower than what they had previously predicted.
Important Information to Note
New information on business activity and attitude in the wake of Trump's election victory will be available later this week with the release of November's preliminary Purchasing Managers' Index (PMI). Investors are watching for indications of optimism or worries that might influence monetary policy choices in the coming months.
The upward trajectory of the EUR/USD exchange rate will be significantly influenced by changes in central bank policies and trade policy.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05484, up 0.10% on the day, as it continues to hover near the lower end of a consolidative range. The pivot point at $1.05772 serves as a crucial level to determine the short-term direction of the pair.
A decisive break above this level could pave the way for further gains toward immediate resistance at $1.06023, with the next key resistance levels positioned at $1.06312. On the downside, immediate support lies at $1.05332, while further weakness could see the pair testing $1.04867 and $1.04599.
The 50-day Exponential Moving Average (EMA) at $1.05730 is acting as a near-term cap on bullish momentum, suggesting that buyers face stiff resistance ahead. The Relative Strength Index (RSI) currently stands at 47, indicating neutral momentum, neither signaling overbought nor oversold conditions. This balanced reading suggests that EUR/USD could remain range-bound until a catalyst drives a breakout.
On the 4-hour chart, the pair is trading below the pivot point, with price action exhibiting a mild bearish tilt. However, a buy-limit strategy at $1.05333 could be a viable setup for traders, aiming for a take-profit target at $1.05866, with a stop-loss placed at $1.05005 to mitigate downside risks.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Pivot Point at $1.05772: A key level to monitor for potential breakout or rejection.
- 50 EMA at $1.05730: Strong resistance, limiting bullish attempts in the short term.
- RSI at 47: Neutral momentum highlights consolidation and indecision.
The EUR/USD pair is trading at $1.05484, up 0.10% on the day, as it continues to hover near the lower end of a consolidative range. The pivot point at $1.05772 serves as a crucial level to determine the short-term direction of the pair.
A decisive break above this level could pave the way for further gains toward immediate resistance at $1.06023, with the next key resistance levels positioned at $1.06312. On the downside, immediate support lies at $1.05332, while further weakness could see the pair testing $1.04867 and $1.04599.
The 50-day Exponential Moving Average (EMA) at $1.05730 is acting as a near-term cap on bullish momentum, suggesting that buyers face stiff resistance ahead. The Relative Strength Index (RSI) currently stands at 47, indicating neutral momentum, neither signaling overbought nor oversold conditions. This balanced reading suggests that EUR/USD could remain range-bound until a catalyst drives a breakout.
On the 4-hour chart, the pair is trading below the pivot point, with price action exhibiting a mild bearish tilt. However, a buy-limit strategy at $1.05333 could be a viable setup for traders, aiming for a take-profit target at $1.05866, with a stop-loss placed at $1.05005 to mitigate downside risks.
EUR/USD - Trade Ideas
Entry Price – Buy Limit 1.05333
Take Profit – 1.05866
Stop Loss – 1.05005
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$533/ -$328
Profit & Loss Per Mini Lot = +$53/ -$32
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD remains cautiously bullish above the pivot at $1.05761, with an RSI of 47 showing moderate momentum.
- Immediate resistance at $1.06023 aligns with the 50-day EMA, forming a critical test for further upside.
- Support at $1.05397 is key for maintaining the bullish bias, while a drop below could shift sentiment downward.
EUR/USD is trading at $1.05567, up 0.27%, as it edges closer to its pivot point at $1.05761, signaling cautious optimism among traders. With an RSI of 47, the pair remains below the neutral 50 level, reflecting subdued momentum. Immediate resistance sits at $1.06023, closely followed by the 50-day EMA at $1.05977.
This proximity suggests that a break above $1.05761 could encourage buyers, potentially pushing EUR/USD toward higher resistance at $1.06312, with a further target at $1.06628 if bullish momentum builds.
On the downside, immediate support is found at $1.05397, and a drop below this level could trigger further declines toward $1.05113, with an additional safety net at $1.04867.
The technical setup suggests a mild bullish sentiment if EUR/USD maintains its position above $1.05397, though a stronger rally requires a clear move past the pivot and resistance levels.
The entry strategy indicates a buy limit at $1.05391, with a target of $1.05771, capitalizing on upward potential near the pivot. However, the stop loss at $1.05119 serves as a safeguard against unexpected reversals, particularly if the pair loses traction near support.
Given the close alignment of key levels, EUR/USD’s outlook leans cautiously bullish, but traders should watch the 50-day EMA closely, as it may act as a pivotal resistance.
EUR/USD - Trade Ideas
Entry Price – Buy Limit 1.05391
Take Profit – 1.05771
Stop Loss – 1.05119
Risk to Reward – 1: 1.4
Profit & Loss Per Standard Lot = +$380/ -$272
Profit & Loss Per Mini Lot = +$38/ -$27
EUR/USD Price Analysis – Nov 15, 2024
Daily Price Outlook
During the European trading session on Friday, the EUR/USD pair broke its five-day losing streak, gaining positive momentum around 1.0577. This rebound was likely driven by a pullback in the US Dollar (USD) following remarks from Fed Chair Jerome Powell.
Powell highlighted the "remarkably good" performance of the US economy, providing the Federal Reserve with the flexibility to gradually reduce interest rates.
Moreover, the European Commission's optimistic growth outlook for the Eurozone in 2025 and 2026, coupled with moderate inflation and improving budget forecasts, further supported the bullish sentiment for the EUR.
US Dollar Pullback and Its Impact on the EUR/USD Pair
On the US front, the broad-based US dollar has recently pulled back after reaching its yearly high. This decline is largely due to comments from Federal Reserve Chair Jerome Powell, who said the US economy is doing "remarkably good." As a result, the Fed has more flexibility to gradually lower interest rates, which has softened the dollar's strength.
Moreover, the recent economic data also supports this trend. The US Producer Price Index (PPI) rose 2.4% year-over-year in October, which was higher than the revised 1.9% increase in September and above the market expectation of 2.3%.
Meanwhile, the Core PPI, which excludes volatile food and energy prices, climbed 3.1%, slightly higher than the 3.0% forecast. This suggests inflationary pressures are still present but may not lead to aggressive Fed rate hikes.
The US Dollar Index (DXY), which tracks the dollar against six major currencies, has fallen from its yearly high of 107.06 on Thursday, now trading near 106.80. This pullback is seen as a result of a slowdown in "Trump trades," which had previously driven the dollar higher. The shift in the dollar's momentum is contributing to changes in market sentiment, affecting global currency dynamics.
Therefore, the pullback in the US dollar, fueled by Jerome Powell's comments and mixed economic data, could lead to a weaker dollar. This might benefit the EUR/USD pair, potentially boosting the euro as the dollar softens, making the euro more attractive.
Eurozone Economic Outlook and ECB Policy Impact on EUR/USD
On the EUR front, the European Commission’s quarterly report projects positive growth for the Eurozone in the next few years.
The economy is expected to grow by 0.8% in 2024, 1.3% in 2025, and 1.6% in 2026. Inflation is forecast to decrease slightly, from 2.4% in 2024 to 1.9% in 2026. The budget deficit is also expected to shrink gradually, from 3.0% in 2024 to 2.8% by 2026.
Germany, the largest economy in the Eurozone, is facing slower growth. While German GDP is expected to grow by 0.7% in 2025 (down from the previous 1.0% forecast), it is projected to rise to 1.3% in 2026, still under the Eurozone average.
This year, Germany’s economy is expected to contract by 0.1%, a shift from earlier forecasts of modest growth. This slower growth in Germany adds some caution to the overall Eurozone outlook.
The European Central Bank (ECB) has hinted at possible interest rate cuts in the future but remains cautious due to high wages and slow labor productivity. ECB officials emphasize that they need more data before making any decisions.
ECB board member Isabel Schnabel also stressed that interest rates should stay the main tool for policy changes.
Therefore, the European Commission’s positive growth outlook for the Eurozone and the ECB’s cautious stance on rate cuts could support the euro in the EUR/USD pair. However, Germany’s slower growth and external risks may limit significant euro gains against the dollar.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05567, up 0.27%, as it edges closer to its pivot point at $1.05761, signaling cautious optimism among traders. With an RSI of 47, the pair remains below the neutral 50 level, reflecting subdued momentum. Immediate resistance sits at $1.06023, closely followed by the 50-day EMA at $1.05977.
This proximity suggests that a break above $1.05761 could encourage buyers, potentially pushing EUR/USD toward higher resistance at $1.06312, with a further target at $1.06628 if bullish momentum builds.
On the downside, immediate support is found at $1.05397, and a drop below this level could trigger further declines toward $1.05113, with an additional safety net at $1.04867.
The technical setup suggests a mild bullish sentiment if EUR/USD maintains its position above $1.05397, though a stronger rally requires a clear move past the pivot and resistance levels.
The entry strategy indicates a buy limit at $1.05391, with a target of $1.05771, capitalizing on upward potential near the pivot. However, the stop loss at $1.05119 serves as a safeguard against unexpected reversals, particularly if the pair loses traction near support.
Given the close alignment of key levels, EUR/USD’s outlook leans cautiously bullish, but traders should watch the 50-day EMA closely, as it may act as a pivotal resistance.
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EUR/USD Price Analysis – Nov 13, 2024
Daily Price Outlook
During the European session on Wednesday, the EUR/USD pair continued its downward slide for the fourth straight day, hitting a fresh low of 1.0592 for the year. This drop comes as traders remain cautious ahead of the release of the US Consumer Price Index (CPI) data for October at 13:30 GMT.
Moreover, the Euro has been struggling recently due to several challenges, including fears of a potential trade war between the Eurozone and the US, as well as the collapse of Germany’s three-party government. These issues have kept the EUR/USD on the defensive, adding pressure to the pair.
EUR/USD Under Pressure Amid Trade Tensions and Political Instability
On the EUR front, the shared currency is struggling due to several challenges, keeping the EUR/USD pair on the back foot. The Euro has been underperforming for the past week, with key issues like the potential for a trade war between the Eurozone and the US, and the collapse of Germany’s three-party government weighing on its value.
US President Donald Trump’s campaign remarks about Europe paying a "big price" for not buying enough American exports have raised concerns about a trade conflict, which could hurt the Euro further.
European Central Bank (ECB) official Olli Rehn warned that Europe needs to prepare for a possible trade war, suggesting that if tensions escalate, Europe shouldn’t be caught off guard.
Rehn also mentioned that the ECB’s Deposit Rate could drop to a neutral rate of around 2% by mid-2025, indicating a possible shift in monetary policy. These statements have added to the uncertainty surrounding the Euro’s future performance.
Furthermore, the political situation in Germany has contributed to the Euro’s weakness. Last week, Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, causing the collapse of Germany’s three-party coalition government.
This led to political instability, with a confidence vote set for December 18 and a snap election planned for February 2025. Investors are now awaiting ECB President Christine Lagarde's speech on Thursday for more clarity on interest rate decisions.
Therefore, the ongoing challenges, including potential trade tensions and political instability in Germany, have weakened the Euro, putting additional pressure on the EUR/USD pair. This uncertainty has contributed to its underperformance, making the pair vulnerable to further declines.
US Inflation Data and Fed Rate Cut Expectations Weigh on EUR/USD
On the US front, the broad-based US dollar is facing caution ahead of the release of the US Consumer Price Index (CPI) data for October, due at 13:30 GMT. The report is expected to show that annual inflation has risen to 2.6% from 2.4% in September, with core CPI, which excludes food and energy prices, increasing by 3.3%. This data will be closely watched by investors as it could affect expectations for the Federal Reserve’s (Fed) monetary policy decisions.
The CPI report will play a key role in shaping market views on whether the Fed will cut interest rates in December. The chance of a 25 basis point (bps) rate cut has dropped slightly to 62% from 70% last week, as investors are starting to think the US economy might improve.
With rising price pressures and President-elect Donald Trump's plans to raise tariffs and lower corporate taxes, inflation could increase, leading the Fed to slow down its rate cuts.
Minneapolis Federal Reserve Bank President Neel Kashkari recently warned that if inflation surprises to the upside, the Fed could reconsider its plans.
He also noted that the current monetary policy is "modestly restrictive," but expects economic growth to continue. Investors will be closely following speeches from other Fed officials on Wednesday for more clarity on future rate decisions.
Therefore, the uncertainty around US inflation data and potential Fed rate cuts has kept the EUR/USD pair under pressure. If inflation rises more than expected, it could reduce the likelihood of a rate cut, strengthening the US dollar and weakening the Euro.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.06110, down by 0.11% for the day, reflecting mild bearish sentiment as it hovers below key resistance levels. The pivot point is established at $1.06285, marking an essential level for intraday traders to watch.
If EUR/USD fails to reclaim this pivot, it could signal further downside pressure. Immediate resistance lies at $1.06568, followed by the next resistance levels at $1.06824, which may act as barriers in any attempted recovery.
On the downside, immediate support is located at $1.05952, with further support seen at $1.05711 and a more critical level at $1.05527, which could potentially limit bearish movement if selling intensifies.
The Relative Strength Index (RSI) stands at 40, signaling bearish momentum but not yet reaching oversold territory, leaving room for additional downside movement. Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $1.06395, above the current trading price, reinforcing a bearish bias as the pair struggles to break through this level.
Traders may consider a potential sell entry below $1.06230, with a target of $1.05950 to capitalize on the bearish momentum. A stop-loss at $1.06458 is recommended to manage risk against unexpected upward moves.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Sentiment: Trading below the 50 EMA ($1.06395) confirms a downward trend.
- Resistance Levels: Immediate resistance lies at $1.06568, limiting upside potential.
- Sell Signal: Possible sell entry below $1.06230, with a target of $1.05950.
The EUR/USD pair is trading at $1.06110, down by 0.11% for the day, reflecting mild bearish sentiment as it hovers below key resistance levels. The pivot point is established at $1.06285, marking an essential level for intraday traders to watch.
If EUR/USD fails to reclaim this pivot, it could signal further downside pressure. Immediate resistance lies at $1.06568, followed by the next resistance levels at $1.06824, which may act as barriers in any attempted recovery.
On the downside, immediate support is located at $1.05952, with further support seen at $1.05711 and a more critical level at $1.05527, which could potentially limit bearish movement if selling intensifies.
The Relative Strength Index (RSI) stands at 40, signaling bearish momentum but not yet reaching oversold territory, leaving room for additional downside movement. Additionally, the 50-day Exponential Moving Average (EMA) is positioned at $1.06395, above the current trading price, reinforcing a bearish bias as the pair struggles to break through this level.
Traders may consider a potential sell entry below $1.06230, with a target of $1.05950 to capitalize on the bearish momentum. A stop-loss at $1.06458 is recommended to manage risk against unexpected upward moves.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.06230
Take Profit – 1.05950
Stop Loss – 1.06458
Risk to Reward – 1: 1.2
Profit & Loss Per Standard Lot = +$280/ -$228
Profit & Loss Per Mini Lot = +$28/ -$22