EUR/USD Forecast: US Dollar under persistent pressure ahead of FOMC Minutes
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADEEUR/USD Current Price: 1.0943
- Market participants hope FOMC meeting Minutes will shed light on future monetary policies.
- European Central Bank President Christine Lagarde will speak in Frankfurt, Germany.
- EUR/USD positive momentum eases, sellers nowhere to be found.
Financial markets maintain an optimistic tone, resulting in EUR/USD moving closer to the 1.1000 psychological threshold. Wall Street posted substantial gains on Monday, with stocks’ gains extending early Asia. Markets became more cautious after London’s opening as investors await the Federal Open Market Committee (FOMC) meeting Minutes. The document will shed clarity on what prompted policymakers to refrain from hiking rates for a second consecutive meeting. Ahead of the release, market players are increasing bets on a potential rate cut in May 2024.
Meanwhile, a successful United States (US) 20-year Treasury auction on Monday weighed on the US Dollar while lifting equities. The highest yield accepted by investors was 4.78%, below the when-issued yield of 4.79%, reflecting solid demand. Speculative interest bets US interest rates will fall next year amid the Federal Reserve´s (Fed) latest decisions hinting at the end of the tightening cycle.
The macroeconomic calendar will remain scarce throughout the first half of the day, with no relevant figures from the Euro Zone. The US will publish the October Chicago Fed National Activity Index ahead of the opening and the aforementioned FOMC Minutes in the American afternoon.
Additionally, the European Central Bank (ECB) President Christine Lagarde is due to speak at an event hosted by the German Ministry of Finance in Frankfurt, Germany. The latest from Lagarde on monetary policy is that she dismissed the odds for rate cuts throughout the first half of 2024. Early on Tuesday, ECB’s Governor Council member Gediminas Simkus said market expectations on ECB rate cuts are “too optimistic,” aligning with Lagarde on cooling investors’ enthusiasm over a policy shift.
EUR/USD short-term technical outlook
The EUR/USD pair seesaws around the 61.8% Fibonacci retracement 1.1275/1.0447 decline at 1.0959. It peaked a few pips above the level for the day, but EUR/USD can still not clear the static resistance area.
From a technical perspective, the daily chart indicates that EUR/USD is overbought but still bullish. Technical indicators aim north with uneven strength, standing at fresh multi-week highs. At the same time, the pair develops well above directionless 100 and 200 Simple Moving Averages (SMAs), standing around the 1.0800 level, while the 20 SMA keeps firming north below the longer ones.
In the near term, and according to the 4-hour chart, EUR/USD offers a neutral-to-bullish stance. Technical indicators have lost their bullish strength but consolidate well into positive territory, with the Relative Strength Index (RSI) indicator developing within overbought levels. Finally, the EUR/USD pair develops far above bullish moving averages, with the 20 SMA maintaining a firmly upward slope far above the longer ones. Once the pair clears the immediate Fibonacci resistance, a test of the 1.1000 mark is on the cards.
Support levels: 1.0925 1.0890 1.0840
Resistance levels: 1.0960 1.1005 1.1045
EUR/USD Current Price: 1.0943
- Market participants hope FOMC meeting Minutes will shed light on future monetary policies.
- European Central Bank President Christine Lagarde will speak in Frankfurt, Germany.
- EUR/USD positive momentum eases, sellers nowhere to be found.
Financial markets maintain an optimistic tone, resulting in EUR/USD moving closer to the 1.1000 psychological threshold. Wall Street posted substantial gains on Monday, with stocks’ gains extending early Asia. Markets became more cautious after London’s opening as investors await the Federal Open Market Committee (FOMC) meeting Minutes. The document will shed clarity on what prompted policymakers to refrain from hiking rates for a second consecutive meeting. Ahead of the release, market players are increasing bets on a potential rate cut in May 2024.
Meanwhile, a successful United States (US) 20-year Treasury auction on Monday weighed on the US Dollar while lifting equities. The highest yield accepted by investors was 4.78%, below the when-issued yield of 4.79%, reflecting solid demand. Speculative interest bets US interest rates will fall next year amid the Federal Reserve´s (Fed) latest decisions hinting at the end of the tightening cycle.
The macroeconomic calendar will remain scarce throughout the first half of the day, with no relevant figures from the Euro Zone. The US will publish the October Chicago Fed National Activity Index ahead of the opening and the aforementioned FOMC Minutes in the American afternoon.
Additionally, the European Central Bank (ECB) President Christine Lagarde is due to speak at an event hosted by the German Ministry of Finance in Frankfurt, Germany. The latest from Lagarde on monetary policy is that she dismissed the odds for rate cuts throughout the first half of 2024. Early on Tuesday, ECB’s Governor Council member Gediminas Simkus said market expectations on ECB rate cuts are “too optimistic,” aligning with Lagarde on cooling investors’ enthusiasm over a policy shift.
EUR/USD short-term technical outlook
The EUR/USD pair seesaws around the 61.8% Fibonacci retracement 1.1275/1.0447 decline at 1.0959. It peaked a few pips above the level for the day, but EUR/USD can still not clear the static resistance area.
From a technical perspective, the daily chart indicates that EUR/USD is overbought but still bullish. Technical indicators aim north with uneven strength, standing at fresh multi-week highs. At the same time, the pair develops well above directionless 100 and 200 Simple Moving Averages (SMAs), standing around the 1.0800 level, while the 20 SMA keeps firming north below the longer ones.
In the near term, and according to the 4-hour chart, EUR/USD offers a neutral-to-bullish stance. Technical indicators have lost their bullish strength but consolidate well into positive territory, with the Relative Strength Index (RSI) indicator developing within overbought levels. Finally, the EUR/USD pair develops far above bullish moving averages, with the 20 SMA maintaining a firmly upward slope far above the longer ones. Once the pair clears the immediate Fibonacci resistance, a test of the 1.1000 mark is on the cards.
Support levels: 1.0925 1.0890 1.0840
Resistance levels: 1.0960 1.1005 1.1045
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.