EUR/USD Faces Decline as Fed Signals Firm Stance

EUR/USD plunged to a six-month low of 1.0543 on Friday amid strong support for the US dollar following the US presidential election and recent comments from Federal Reserve officials.
RoboForex | 722 hari yang lalu

By RoboForex Analytical Department

EUR/USD plunged to a six-month low of 1.0543 on Friday amid strong support for the US dollar following the US presidential election and recent comments from Federal Reserve officials.

Federal Reserve Chair Jerome Powell's recent statement underscored a cautious approach to cutting interest rates, citing persistent GDP growth, robust employment, and ongoing inflationary pressures. This stance suggests a possible delay or reduction in the anticipated rate cuts, contrasting with earlier market expectations favouring a rate reduction in December.

As Powell indicated a less accommodative monetary policy moving forward, the probability of a December rate cut has notably decreased, bolstering the US dollar's appeal.

Technical analysis of EUR/USD

H4 chart analysis: the EUR/USD price has reached the 1.0500 level, forming what appears to be the latter half of a downward trend. Today, we expect consolidation range formation above this level. If the price breaks upwards, a corrective wave towards 1.0600 could occur. Subsequently, we expect the continuation of the downward impulse to the 1.0404 level. This bearish EUR/USD outlook is supported by the MACD indicator, which remains below zero and is directed downwards. 

H1 chart analysis: EUR/USD is making a downward move towards 1.0404. After achieving this target, a corrective upward movement towards 1.0600 is possible, suggesting a temporary pause in the bearish trend. The Stochastic oscillator supporting this scenario is close to 80 and signals an imminent fall to 20, in line with the expected continuation of the downward movement.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

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