Before the American holiday, the price of the EUR/USD pair was exposed to selling operations after testing the 1.0965 resistance level, its highest in three months. Also, selling operations reached the 1.0852 support level before settling around the 1.0888 level at the beginning of Thursday’s session. Recently, the gains of the US dollar against the rest of the other major currencies came as a natural reaction to the results of economic data, led by a decline in weekly jobless claims and an increase in US consumer confidence.
Before that, Fed officials concluded earlier this month that US inflation was declining steadily and agreed to closely monitor incoming data to ensure that the pace of price increases would continue to slow toward their 2% target, according to the minutes of their meeting, which were released on Monday. Tuesday. As a result, policymakers decided to leave the key US interest rate unchanged, but keep it high for an extended period. Furthermore, speaking at a news conference after the meeting, Fed Chairman Jerome Powell kept the door open to raise US interest rates again, even though most economists say they believe the US central bank is done raising interest rates.
Officials agreed on the period from October 31 to November. The minutes of the bank's October 1 meeting said they would raise the key interest rate again if incoming economic data "indicate that progress" toward the 2% target is "insufficient.". consequently, this suggests that inflation will need to turn higher for the Fed to be able to raise US interest rates again.
The US central bank's decision to keep its key short-term interest rate unchanged for the second meeting in a row marked the longest pause in its rate hike campaign since it began raising interest rates in March 2022. Lately, The Fed raised its benchmark interest rate 11 times and since then it has risen. The percentage went from almost zero to about 5.4%, which is the highest in 22 years. Moreover, Fed officials expect that future economic data “will help clarify the extent to which inflation remains low, demand moderates, and Labor markets reach a better balance between demand and supply,” the minutes said. However, policymakers stressed that they would need to see more data indicating that inflation pressures are easing, to be sure that inflation is heading towards their 2% target.
For his part, Bank Governor Jerome Powell expressed some optimism in a press conference after the November 1 meeting. He said: “We are making progress” in taming inflation, although he acknowledged that such progress would come “in lumps and will be full of obstacles.” On the other side, US inflation has declined since its peak of 9.1% in June 2022 to 3.2% last month. Meanwhile, the October report also showed that core prices, which exclude volatile food and energy categories, fell from September to October, and indicated that inflation was continuing to decline.
EUR/USD Analysis Today:
According to the performance on the daily chart below, the price of the EUR/USD pair is still on an upward rebound path. As we mentioned before, moving towards the psychological resistance level of 1.1000 will support the strength of the bulls’ control over the trend. Recently, EUR/USD may reach that peak today, despite the American holiday. Therefore, if the PMI readings for the manufacturing and services sectors of the Eurozone economies are stronger than expectations. On the other hand, over the same period, the EUR/USD price moved towards the support levels of 1.0820 and 1.0770, a threat to the current upward correction.
.jpeg "EUR/USD (Daily Chart)")