Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1477.
- Add a stop-loss at 1.1650.
- Timeline: 1-2 days.
Bearish view
- Sell the EUR/USD pair and set a take-profit at 1.1650.
- Add a stop-loss at 1.1477.
The EUR/USD exchange rate remained steady at its highest level in two weeks as US risks eased. It rose to a high of 1.1592, its highest level since October 30th. It has jumped by over 13% from its lowest level this year as the US dollar softened.
The EUR/USD pair rose after the House of Representatives voted to end the longest government shutdown ever, a move that removed one of the biggest risks in the market.
This means that market participants will start receiving important macroeconomic data in the coming months. In a statement on Wednesday, Karoline Leavitt warned that the upcoming US inflation and jobs numbers may not be released. The inflation report was to come out this week and economists believe that it may not come out entirely.
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The next key EUR/USD news to watch will come out on Thursday when Eurostat publishes the latest industrial production report, which will provide more color on the state of the economy. The European Central Bank (ECB) will publish the latest economic bulletin, highlighting the state of the bloc's economy.
The other key catalyst for the pair will be the upcoming statement by Beth Hammack, a senior Federal Reserve official. In her recent statements, she warned that inflation remained stubbornly high and that the bank needs to take time to cut interest rates.
The Federal Reserve has already slashed interest rates this year and economists expect it to cut interest rates in the December meeting. Data on Polymarket shows that most traders anticipate the bank to start cutting interest rates in the coming weeks.
EUR/USD Technical Analysis
The daily timeframe chart shows that the EUR/USD exchange rate has rebounded in the past few days, moving from a low of 1.1472 earlier this month to the current 1.1585.
The pair remains below the 50-day Exponential Moving Average (EMA), a sign that the ongoing recovery is still shaky. That's because the pair has formed a double-top pattern at 1.1825 and a neckline at 1.1393, its lowest level in August this year.
Therefore, the most likely scenario is where the EUR/USD pair resumes the downtrend and possibly retests this month’s low of 1.1475. On the other hand, a move above the 50-day moving average at 1.1590 will invalidate the bearish outlook.
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