(MENAFN- Daily Forex) Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1500.
• Add a stop-loss at 1.1725.
• Timeline: 1-2 days.

Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1725.
• Add a stop-loss at 1.1500.

The EUR/USD exchange rate dropped below a key support level as traders watched the progress on the French political crisis and the latest Federal Reserve minutes. It wa trading at 1.1630, down from the year-to-date high of 1920 Minutes and France Political Crisis

The EUR/USD pair moved below the lower side of the rising wedge pattern as the political crisis in France continued. In a statement, Sebastien Lecornu, the outgoing premier, said that he had made progres in talks with parliamentary groups.

He now expects that Emmanuel Macron will be in a position to name a new Prime Minister and possibly reach a budget compromise in the near term. Failure to do that will likely lead to a new general election in the country.

The EUR/USD pair also pulled back after the US government shutdown continued. Odds that the shutdown will continue for a prolonged period have continued rising in the past few days as Trump and Democrats have maintained their hard stance.

Meanwhile, the Federal Reserve published minutes of the lt meeting where officials decided to slash interest rates by 0.25% for the first time this year. The minutes showed that some officials said it will be important to monitor key macro conditions to evaluate whether to cut rates again.

Odds of a nother cut have risen in the past few days after a report by ADP showed that the economy lost jobs in September. The Fed has been more concerned about the labor market, while expressing concerns about inflation.

The main catalyst for the pair will be the upcoming ECB minutes o the last meeting/USD Technical Analysis

The daily timeframe chart shows that the EUR/USD pair has pulled back in the past few days. It dropped from a high of 1.1920 on September 17 to a low of 1.1600.

The pair moved below the lower side of the rising wedge pattern, which is made up of two ascending and converging trendlines. Also, the Relative Strength Index (RSI) and the MACD have all pointed upwards.

Therefore, more downside will be confirmed if it drops below the 100-day Exponential Moving Average at 1.1575. A move below that level will point to more downside, potentially to the psychological point at 1.1500. A move above the resistance level at 1.1700 will invalidate the bearish outlook.

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