EUR/USD Under Pressure, Eyes 1.0500 as FOMC Looms
The EUR/USD pair is facing downward pressure and could potentially revisit the previous week's low at 1.0500 as it grapples with a series of influential factors.
In anticipation of the Federal Open Market Committee (FOMC) policy decision in November, with expectations of maintaining the current interest rate at 5.5%, the EUR/USD pair is currently trading lower around 1.0570 during the Asian session on Wednesday. This trend follows the pattern we previously highlighted, where the price rebounded from the 61.8% Fibonacci level, coinciding with the formation of a Gartley harmonic pattern. As predicted, the price has commenced a descent, with 1.0500 as the potential target point.
Economic data reveals another layer of complexity. The Eurozone Harmonised Index of Consumer Prices (HICP) has recently shown a significant slowdown, dropping from an annual rate of 4.3% to 2.9% in October. This substantial deceleration in consumer prices aligns with market expectations that the European Central Bank (ECB) is unlikely to pursue further interest rate hikes. In addition, the looming risks of a recession may continue to undermine the EUR/USD pair.
As the pair faces these headwinds, potential support levels can be identified. The psychological level of 1.0550 may serve as a preliminary support level, followed by the previous week's low at 1.0521. If the pair convincingly breaches this latter level, it could open the door to further downward movement toward the critical level around 1.0500.
In conclusion, the EUR/USD pair finds itself in a challenging position as it contends with various economic and geopolitical factors. The upcoming FOMC decision and the uncertainty surrounding interest rates, along with the deceleration in European consumer prices, all contribute to the pair's current trajectory. Traders and investors will be closely monitoring these developments as they unfold.
Our preference
Short positions below 1.0600 with targets at 1.0520 & 1.0500 in extension.
The EUR/USD pair is facing downward pressure and could potentially revisit the previous week's low at 1.0500 as it grapples with a series of influential factors.
In anticipation of the Federal Open Market Committee (FOMC) policy decision in November, with expectations of maintaining the current interest rate at 5.5%, the EUR/USD pair is currently trading lower around 1.0570 during the Asian session on Wednesday. This trend follows the pattern we previously highlighted, where the price rebounded from the 61.8% Fibonacci level, coinciding with the formation of a Gartley harmonic pattern. As predicted, the price has commenced a descent, with 1.0500 as the potential target point.
Economic data reveals another layer of complexity. The Eurozone Harmonised Index of Consumer Prices (HICP) has recently shown a significant slowdown, dropping from an annual rate of 4.3% to 2.9% in October. This substantial deceleration in consumer prices aligns with market expectations that the European Central Bank (ECB) is unlikely to pursue further interest rate hikes. In addition, the looming risks of a recession may continue to undermine the EUR/USD pair.
As the pair faces these headwinds, potential support levels can be identified. The psychological level of 1.0550 may serve as a preliminary support level, followed by the previous week's low at 1.0521. If the pair convincingly breaches this latter level, it could open the door to further downward movement toward the critical level around 1.0500.
In conclusion, the EUR/USD pair finds itself in a challenging position as it contends with various economic and geopolitical factors. The upcoming FOMC decision and the uncertainty surrounding interest rates, along with the deceleration in European consumer prices, all contribute to the pair's current trajectory. Traders and investors will be closely monitoring these developments as they unfold.
Our preference
Short positions below 1.0600 with targets at 1.0520 & 1.0500 in extension.
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