Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1470.
- Add a stop-loss at 1.1600.
- Timeline: 1-2 days.
Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1600.
- Add a stop-loss at 1.1470.
The EUR/USD exchange rate was flat on Wednesday morning ahead of the upcoming European inflation data, Federal Reserve minutes, and US September jobs report. It was trading at 1.1580, where it has remained this week.
European Inflation, FOMC Minutes, and US Jobs Data
The EUR/USD exchange rate remained in a tight range as traders waited for the upcoming European inflation data. A report by Eurostat is expected to show that the headline consumer inflation moved in the right direction in October as it dropped to 2.1%. Core inflation, which strips the volatile food and energy prices, is expected to remain at 2.4%.
The numbers will come two hours after the European Central Bank (ECB) publishes minutes of the last meeting. In that meeting, officials decided to leave interest rates unchanged after delivering several cuts earlier this year. With inflation hovering at the 2% target, analysts anticipate that the ECB will not cut rates again this year.
The EUR/USD exchange rate will be in the spotlight after the Federal Reserve releases minutes of the last meeting. Unlike the ECB, the Fed decided to cut interest rates by 0.25% to between 3.75% and 4%.
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Fed officials have expressed mixed sentiments on the next decision. Some hawks have made the case for not cutting interest rates as inflation has remained above 2% this year.
On the other hand, doves like Stephen Moran and Michele Bowman have maintained that rate cuts were necessary because of the trends in the labor market. The Bureau of Labor Statistics will publish the latest jobs numbers on Thursday.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD exchange rate has remained under pressure in the past few weeks. The current price of 1.1580 is slightly below the year-to-date high of 1.1915.
The pair has moved slightly below the 50-day Exponential Moving Average (EMA). Also, the Relative Strength Index (RSI) has moved below the neutral point at 50. The Percentage Price Oscillator (PPO) remained below the zero line.
Therefore, the pair will likely continue falling as sellers target the key support at 1.1478. A move above the key resistance at 1.1680 will invalidate the bearish outlook and point to more gains.
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