Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1390.
- 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 1.1390.
The EUR/USD exchange rate retreated aa traders reacted to the relatively strong US jobs numbers and as traders waited for the upcoming statements from senior European Central Bank (ECB) officials. It was trading at 1.1513, down from the year-to-date high of 1.1915.
Christine Lagarde Statement
The EUR/USD exchange rate pulled back after the Bureau of Labor Statistics (BLS) belatedly released the recent September jobs numbers. This report showed that the economy created over 110k jobs in September, a sign that the labor market stabilized before the government shutdown.
The pair also reacted to a statement by John Williams, who noted that he saw room for interest rate cuts in the near term. His statement raised the possibility that the bank will cut interest rates in the December meeting.
Still, analysts believe that the next meeting will be a tossup, with the final decision depending on two officials, including Jerome Powell.
The next key data to watch will be the upcoming US consumer confidence report, which will come out on Tuesday. This is an important report that has an impact on the Federal Reserve decision. The US will also release the latest pending home sales data and retail sales numbers on Tuesday.
Top Forex Brokers
The EUR/USD exchange rate will react 5 to the upcoming statements by European Central Bank (ECB) officials, who will shed light on the next interest rate decision.
Christine Lagarde, the bank’s head, will deliver a speech on Monday. Piero Cipollone, the Italian Central Bank governor, will also talk. Still, these statements will likely have a limited impact since investors anticipate the bank to leave interest rates unchanged in the upcoming meetings.
EUR/USD Technical Analysis
The EUR/USD exchange rate has been under pressure in the past few months. It was trading at 1.1513, which is a few points below the 50-day Exponential Moving Average (EMA).
The pair has formed a head-and-shoulders pattern, which is one of the most common bearish reversal pattern. Also, the MACD indicator has remained below the zero line, while the Relative Strength Index has moved downwards.
Therefore, the pair will likely continue falling as sellers target the next key support level at 1.1390, its lowest level in July this year. A move above the psychological level at 1.1600 will invalidate the bearish outlook.
Ready to trade our free trading signals? We’ve made a list of the best European brokers to trade with worth using.