EURUSD: FOMC week
The European Central Bank held its meeting during the previous week, where they left rates unchanged for the first time after 10 consecutive rate increases. Although the inflation is still above their referenced rate of 4%, with expectation that it will end this year at level of 5.6%, still, the ECB members hope that it will gradually decrease to the level of 2.1% within the next two years. The ECB is also following the narrative of the Fed for “higher for longer” for both inflation and interest rates. Still, there are economists who are noting that the rate cut might come sooner than expected by the ECB, considering the significant slowdown of the EU economy. As for other indicators posted during the previous week, GfK Consumer Confidence in November for Germany was standing at minus 28.1, a bit higher from minus 26.6 expected by the market, HCOB Manufacturing PMI Flash for October was 40.7, a bit higher from estimated 40.0. Germany's Ifo Business Climate index in October reached 86.9 a bit better from expected 85.9.
Posted figures for the US Durable Goods Orders for September were standing at 4.7% a way above market expectation of 1.7%. At the same time the US GDP annualized Growth Rate for Q3 reached 4.9%, again above market estimate of 4.3%. The resilience of the US economy is indeed remarkable, considering the high increase of interest rates by the Fed during the course of last and this year. On a positive side is also that major Fed's inflation gauge PCE Price Index was standing at 3.4%, unchanged from the previous post, while core PCE was standing at 3.7% a bit lower from revised 3.8%. At the same time, Michigan Consumer Sentiment final for October was a bit improved at level of 63.8%, from 68.1 posted previously.
The currency pair was traded in a relatively shorter range during the previous week. The ECB held interest rates as market expected, while the GDP figures posted for the US showed high resilience of the US economy, so USD gained in strength a bit. The highest weekly level reached was 1.069, after which, the eurusd returned back to the level of 1.052. The RSI continues to move close to the level of 50, holding still around 46 during the week. It shows that the market is still not ready to decide on a trading side. Moving average of 50 days continued with its divergence from its MA200 counterpart, indicating that potential cross is still far away.
The resistance line at 1.067 has been tested during the previous week, but without market strength to push the price above this level. The market started a short reversal to the downside, where the support line at 1.055 has been tested. Again there has not been strength to break this level. The market is evidently preparing for the week ahead when the FOMC meeting will be held, and also several important data for both Eur and Usd will be posted. During the first half of the week, it could be expected that the market will move in a current range, between S/R lines 1.067 and 1.055. However, the FOMC meeting on November 1st might bring back some volatility. Current charts are indicating potential for the resistance line at 1.067 to be breached.
Important news to watch during the week ahead are:
Euro: GDP Growth Rate for Q3 for Germany, Inflation Rate for Germany, Euro Area Inflation Rate for October, Euro Area GDP Growth Rate for Q3, Unemployment Rate for October for Germany.
USD: CB Consumer Confidence for October, ISM Manufacturing PMI for October, Fed Interest Rate Decision, Non-farm Payrolls for October, Unemployment Rate for October, ISM Services PMI for October
Posted figures for the US Durable Goods Orders for September were standing at 4.7% a way above market expectation of 1.7%. At the same time the US GDP annualized Growth Rate for Q3 reached 4.9%, again above market estimate of 4.3%. The resilience of the US economy is indeed remarkable, considering the high increase of interest rates by the Fed during the course of last and this year. On a positive side is also that major Fed's inflation gauge PCE Price Index was standing at 3.4%, unchanged from the previous post, while core PCE was standing at 3.7% a bit lower from revised 3.8%. At the same time, Michigan Consumer Sentiment final for October was a bit improved at level of 63.8%, from 68.1 posted previously.
The currency pair was traded in a relatively shorter range during the previous week. The ECB held interest rates as market expected, while the GDP figures posted for the US showed high resilience of the US economy, so USD gained in strength a bit. The highest weekly level reached was 1.069, after which, the eurusd returned back to the level of 1.052. The RSI continues to move close to the level of 50, holding still around 46 during the week. It shows that the market is still not ready to decide on a trading side. Moving average of 50 days continued with its divergence from its MA200 counterpart, indicating that potential cross is still far away.
The resistance line at 1.067 has been tested during the previous week, but without market strength to push the price above this level. The market started a short reversal to the downside, where the support line at 1.055 has been tested. Again there has not been strength to break this level. The market is evidently preparing for the week ahead when the FOMC meeting will be held, and also several important data for both Eur and Usd will be posted. During the first half of the week, it could be expected that the market will move in a current range, between S/R lines 1.067 and 1.055. However, the FOMC meeting on November 1st might bring back some volatility. Current charts are indicating potential for the resistance line at 1.067 to be breached.
Important news to watch during the week ahead are:
Euro: GDP Growth Rate for Q3 for Germany, Inflation Rate for Germany, Euro Area Inflation Rate for October, Euro Area GDP Growth Rate for Q3, Unemployment Rate for October for Germany.
USD: CB Consumer Confidence for October, ISM Manufacturing PMI for October, Fed Interest Rate Decision, Non-farm Payrolls for October, Unemployment Rate for October, ISM Services PMI for October
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