The US Dollar Has Fallen To Its Two-Week Low. How Soon Is The Fed Ready To Start Reducing The Rate?

By RoboForex Analytical Department

The EUR/USD pair started the new week of November with a surge to a two-month peak, reaching the 1.0928 mark.

Investors believe that the interest rate of the US Federal Reserve has peaked. The market is now preoccupied with another question: how soon is the Fed ready to start reducing the rate? According to CME FedWatch data, expectations for the Federal Reserve to initiate monetary policy easing already stand at 30%. However, tangible actions are expected no earlier than May of next year.

Estimates of the prospects of the Fed’s monetary policy shifted after the statistics released came out weaker than expected. Specifically, inflation turned out to be lower than the consensus forecast.

Technical Analysis Of EUR/USD Currency Pair:

On the H4 EURUSD chart, a consolidation range has formed around 1.0870. Breaking upwards, the range extended to 1.0920, exhausting the market's growth potential. A decline link to 1.0895 might form today. Next, another growth structure to 1.0960 is not excluded. After the price reaches this level, a new decline wave to 1.0827 might occur. Technically, this scenario is confirmed by the MACD, with its signal line above zero, strictly pointing upwards.

On the H1 EURUSD chart, a narrow consolidation range has formed around 1.0895. Today, the price completed a growth phase to 1.0935, breaking out of the range upwards. At some point, a decline to 1.0895 could occur (a test from above). Next, another growth phase to 1.0960 is not excluded, followed by a decline to 1.0827. This is the first target. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below 80 and continuing to fall towards the 20 mark.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.