US
- The Fed left interest rates unchanged as expected with basically no change to the statement.
- Fed Chair Powell stressed once again that they are proceeding carefully as the full effects of policy tightening have yet to be felt.
- The US Core PCE last week came in line with expectations.
- The labour market remains pretty resilient but we are starting to see some weakness as Continuing Claims missed expectations once again last week pointing to an upward trend.
- The US Employment Cost Index showed that wage growth picked up in Q3.
- The US Consumer Confidence fell for the third consecutive month although the data beat expectations.
- The US ISM Manufacturing PMI yesterday missed by a big margin.
- The market doesn’t expect the Fed to hike anymore.
EU
- The ECB left interest rates unchanged as expected as the central bank has ended its tightening cycle.
- President Lagarde highlighted the weakness in the Eurozone economy and reaffirmed that rates will make a substantial contribution to curbing inflation.
- The Eurozone CPI missed expectations on the headline figures but the Core measure remained unchanged. This won’t change the ECB’s stance anyway.
- The labour market remains very tight with the unemployment rate hovering at record low levels.
- The recent Eurozone PMIs missed across the board as the economy continues to struggle.
- The market doesn’t expect the ECB to hike anymore.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that the EURUSD pair broke out again from the bear flag but bounced on the key support around the 1.05 handle. The pair is now consolidating waiting for a catalyst to push the price in either direction. The target for the buyers on the upside would be the 1.08 handle, while the sellers will be eyeing the 1.02 level.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can clearly see the consolidation between the 1.0515 support and the 1.0630 resistance with a couple of fakeouts. The price action inside such ranges can be messy, so the market participants would be better off waiting only for a breakout on either side or lean on the main support and resistance levels.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is approaching the resistance zone. This is where we can expect the sellers to step in with a defined risk above the zone to position for a drop back into the support and hope for a breakdown. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and position for a rally into the 1.08 handle.
Upcoming Events
Today, we have only the US Jobless Claims data, which will be important for the market given the recent weakness in Continuing Claims. Tomorrow, we conclude the week with the Eurozone Unemployment Rate, the US NFP report and the ISM Services PMI.
