(
MENAFN- Daily Forex) Bearish View
- Sell the EUR/USD pair and set a take-profit at 1.0760.
- Add a stop-loss at 1.0920.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 1.0850 and a take-profit at 1.0920.
- Add a stop-loss at 1.0785.
The EUR/USD pair pulled back as the US dollar index bounced back ahead of the upcoming US general election and the Federal Reserve meeting. It dropped to 1.0835 as it erased some of the gains made last week.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Fed Decision and US Election
The EUR/USD pair retreated after the US published weak jobs numbers on Friday. According to the Bureau of Labor Statistics (BLS), the economy created just 12,000 jobs in October, the lowest reading in over two years.
The bureau blamed the weak jobs numbers on the recent hurricanes and the furloughed workers by Boeing. The unemployment rate remained at 4.1%, while the average hourly wage growth remained steady.
These were closely watched numbers because the Fed has started to put more emphasis on the labor market instead of inflation, which is moving towards its target of 2.0%.
The Fed will start its second-last monetary policy meeting of the year on Tuesday, and deliver its decision on Wednesday. Before that, the Fed will receive the closely-watched durable goods orders on Monday and the services PMI numbers on Tuesday.
Analysts expect the Fed to cut interest rates by just 0.25%, a drop from the 0.50% it slashed in the last monetary policy meeting.
This decision will also be important because it comes a day after the US goes to an election that will determine fiscal policy for the next few years. It has become highly difficult to predict the winner of this election, with most polls showing that the two candidates are tied in most states.
A Trump win could lead to a stronger dollar as investors move to its safety ahead of the upcoming trade war. A Harris win will be a sign of continuity, leading to a relatively weaker US dollar/USD Technical Analysis
The daily chart shows that the EUR/USD pair formed a double-top pattern around 1.1200 in September. It then crashed hard in October as traders focused on the strong jobs numbers, which reduced the odds of another jumbo cut.
EURUSD Chart by TradingView
The pair has moved below the key support at 1.0978, its highest swing on March 8. It has remained below the 50-day moving average and formed a bearish engulfing pattern, a popular reversal sign.
Therefore, the pair will likely drop and retest the support point at 1.0760, its lowest point on September 23rd.
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