Fundamental Overview
The USD weakened across the board yesterday following soft ADP data and a Bloomberg report saying that Hassett emerged as the frontrunner for the Fed Chair position.
The greenback was already under some pressure caused by Fed’s Williams endorsement for a December cut on Friday. The probability for a December cut is now at 76%, which generally makes it a done deal.
We won’t get much data before the FOMC meeting, so the focus will likely be mainly on jobless claims and ADP data. Weak data should keep weighing on the greenback, while strong data could provide some short-term support. At the end of the day though, it’s all about the FOMC decision and the following NFP and CPI reports.
On the EUR side, nothing has changed fundamentally. The ECB policymakers continue to repeat that the current policy is appropriate and that they won’t respond to small or shot-term deviations from their 2% target. The recent Eurozone data has been supporting the central bank neutral stance.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that EURUSD has been trading in a wide range between the 1.17 and 1.15 levels. There’s not much we can glean from this timeframe, so we need to zoom in to see some more details.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong resistance zone around the 1.1590 level. This is where the sellers are stepping in with a defined risk above the resistance to position for a drop back into the 1.1550 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 1.1670 level next.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here but if we get a pullback into the 1.1550 level, we can expect the buyers to step in there with a defined risk below the 1.1540 level to position for a rally back into the resistance. The sellers, on the other hand, will look for a break below the 1.1540 level to increase the bearish bets into new lows. The red lines define average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures. Tomorrow, we have the US Thanksgiving holiday which is likely to make the final part of the week more rangebound. Finally, on Friday we conclude the week with the preliminary inflation data from the major Eurozone economies.
