Bullish view
- Buy the EUR/USD pair and set a take-profit at 1.1900.
- Add a stop-loss at 1.1675.
- Timeline: 1-2 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1675.
- Add a stop-loss at 1.1900.
The EUR/USD pair was flat in a low-volume environment on Monday morning. It was trading at 1.1770, a few pips below last week’s high of 1.1817 as traders start closing their books for the year and the holiday mood continues.
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FOMC Minutes Ahead
The EUR/USD exchange rate was relatively unchanged on Monday as volumes in the forex market remained thin because of the holiday mood.
This consolidation may continue in the coming day as there is no major macro data from Europe and the United States. The most important numbers from the US came recently when the government published the recent GDP, jobs, and inflation report.
These numbers showed that the American economy was doing well. A report by the Bureau of Economic Analysis (BEA) showed that the economy grew by 4.3% in the third quarter, higher than what most analysts were expecting.
More data showed that the unemployment rate worsened to 4.6% in November as the economy created over 64,000 jobs. One reason for the higher jobless rate was because of the job losses in the government.
Inflation, on the other hand, has continued falling, with the headline Consumer Price Index (CPI) moving to 2.6% in November this year.
Looking ahead, the only major catalyst for the EUR/USD pair will be the upcoming FOMC minutes. These minutes will provide more information on the last monetary policy meeting in which officials decided to cut rates for the third consecutive time.
The meeting had three dissenters, with Stephen Miran voting for a 50 basis point rate cut. Two officials voted to leave rates unchanged, pointing to inflation, which has remained above the 2% target for over four years.
Meanwhile, the European Central Bank left interest rates unchanged in its last meeting of the year and hinted that they will remain intact in the foreseeable future.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD pair was flat on Monday morning. It was trading at 1.1771, a few points below its highest point this month. The pair remains slightly above the important support level at 1.1673, the neckline of the small inverse head-and-shoulders pattern.
It also remains above the 50-day Exponential Moving Average (EMA), while the Supertrend indicator has turned green. Therefore, the pair will likely resume the uptrend as bulls target the key resistance at 1.1915, the highest point this year.
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