(
MENAFN- Daily Forex) Bullish View
- Buy the EUR/USD pair and set a take-profit at 1.0900.
- Add a stop-loss at 1.0700.
- Timeline: 1-2 days.
Bearish View
- Sell the EUR/USD pair and set a take-profit at 1.0700.
- Add a stop-loss at 1.0900.
The EUR/USD sell-off continued as US bond yields soared to the highest point in months as doubts about the next actions by the Federal Reserve rose. It retreated to a low of 1.0800, its lowest level since August 2, and 3.67% below the year-to-date high.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Federal Reserve Doubts Rise
The consensus among investors a few weeks ago was that the Federal Reserve would deliver several jumbo rate cuts to salvage the labor market. As a result, it was not by surprise when the bank decided to cut rates by 0.50% in the last meeting.
Now, however, there are doubts about whether the Fed will move ahead with these jumbo cuts after the US published several upbeat data.
Data released earlier this month showed that the labor market was not doing as badly as initially feared. The unemployment rate dropped to 4.1% and wage growth continued as the economy created over 254k jobs.
Another report revealed that inflation was still a challenge as it dropped to 2.4% in September. Retail sales also continued rising during the month. As a result, the ten-year Treasury yield rose to 4.20%, while the 30-year and 5-year rose to 4.50% and 4%, respectively.
EURUSD Chart by TradingView
The European Central Bank (ECB), on the other hand, has pointed to more cuts since the economy is not doing well, while inflation has moved below the 2% target. Data released last week showed that the headline Consumer Price Index (CPI) dropped to 1.7%.
The key EUR/USD news to watch will be statements by Christine Lagarde and Philip Lane, ECB's Chief Economist, who will speak at an IMF meeting in Washington/USD Technical Analysis
The EUR/USD exchange pair continued its sell-off, falling to the psychological point at 1.0800, its lowest level since August 2. It has dropped below important support levels, including the key point at 1.0982, its highest point on March 8.
The pair has also moved below the 50-day and 25-day Weighted Moving Averages (WMA). At the same time, the Money Flow Index (MFI) and the MACD indicator have continued falling.
It is also approaching the important support at 1.0770, which coincides with the lowest swings since October last year. Therefore, the pair will likely bounce back as investors start to buy the dip. A break below the ascending trendline will point to more sell-off, with the next point to watch being at 1.0700.
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