Bearish view
Sell the EUR/USD pair and set a take-profit at 1.1100.
Add a stop-loss at 1.1250.
Timeline: 1-2 days.
Bullish view
Buy the EUR/USD pair and set a take-profit at 1.1250.
Add a stop-loss at 1.1100.
The EUR/USD pair continued its slow downward trend on Tuesday morning as market participants reacted to the upcoming macro data and central bank decisions. It dropped to 1.1172, down by 4.56% from its August high of 1.1715.
Top Regulated Brokers
US Macro Data and Central Bank Decisions
The EUR/USD pair retreated as traders waited for important macro data, including the upcoming US consumer confidence and housing data. Economists expect the Conference Board report to show that consumer confidence dropped further in October as mortgage rates and inflation rose. The US will also publish the latest new home sales and durable goods orders numbers.
Looking ahead, the EUR/USD pair will react to the upcoming Federal Reserve interest rate decision. Economists expect the bank to leave interest rates unchanged between 3.75% and 4% after hiking rates in the last meeting. Officials may hint that they will hike again in the December meeting if inflation remains steady.
The US will also release some important macro data on Thursday. These include the personal consumption expenditure (PCE) report and the third-quarter GDP report. These metrics will provide more information on the US economy.
The EUR/USD pair will also react to the upcoming European Central Bank (ECB) interest rate decision on Thursday. Economists expect the bank will leave interest rates unchanged after hiking in the last meeting.
The most recent data showed that the headline consumer inflation rose 3.8% in September from 3.2% in August. The reading was much higher than ECB’s target of 2.0% and was caused by the rising energy prices.
This decision comes at a time when countries like Italy and France are facing a substantial crisis as protests escalate.
EUR/USD Technical Analysis
The daily chart shows that the EUR/USD pair has continued its downward trend, reaching a low of 1.1173, its lowest level on October 15. It has remained below 50-day moving average and the Supertrend indicator. These technicals suggest that bears have prevailed.
The Relative Strength Index (RSI) and the MACD indicators have continued falling. The RSI fell to 34 and is pointing downwards. Therefore, the pair will likely continue falling, potentially to the crucial support level of 1.1110, its lowest level this month. A move below that level will point to more downside, potentially to the support level of 1.1100. Ready to trade our daily Forex signals? Here’s a list of some of the best Forex platforms in Australia to check out