FOREX Fundamental analysis for EUR/USD on October 11, 2024
The US Federal Reserve has already made it clear that it will not make decisions based on a single report, no matter how important it is.
Inflation accelerated in September, and the number of applications for unemployment benefits rose to the highest level since August 2023. These data somewhat eased the pressure on the EUR/USD pair. The pair bounced back from a two-month low. But does this mean that the asset has found the bottom?
Of course, the Fed relies on various data in its work. But, in any case, decisions are made by people. Despite the acceleration of core inflation to 3.3% and the rise in consumer prices to 2.4%, the three FOMC members do not attach much importance to this factor. Chicago Fed President Austan Goolsby claims that inflation has been gradually declining for 12-18 months, and his colleague from Richmond, Thomas Barkin, believes that inflation is moving in the right direction. John Williams, head of the Federal Reserve Bank of New York, is also confident that prices are heading towards the 2% target. Only Rafael Bostic of the Atlanta Fed is open to discussing the need to maintain the 5% rate at the November meeting.
The futures market forecasts a 43 basis point rate cut in 2024, which is slightly lower than expectations for the ECB deposit rate, which may fall by 47 bps. Recently, these expectations have decreased from 70 bps, which led to a drop in the EUR/USD pair.
The dynamics of currency trading on forex is largely determined by the differential rate of tightening of the monetary policy of Central Banks. The ECB is ready to accelerate the pace of monetary expansion, which puts pressure on the euro. Philip Lane, chief economist at the ECB, noted that if new statistics indicate an acceleration in the decline in inflation or an insufficient economic recovery, then rates will be adjusted faster.
Bloomberg expects a rate cut at each ECB meeting until March, and then in June and December. As a result, the rate may decrease to 2%, which is lower than the previous forecast of 2.5%.
Thus, experts believe that the scale of easing of the ECB's monetary policy may reach 150 bps. Deutsche Bank predicts that if expectations of a rate increase to 170 bps are confirmed, EUR/USD may fall to 1.07. In the worst case scenario, with a global trade war with China, the euro could fall to parity with the dollar.
EUR/USD is unlikely to find the bottom before the ECB meeting on October 17. The optimal forex trading strategy remains to sell the pair on the rise to the levels of 1.1-1.102. We also do not exclude sales at the current exchange rate with a target of 1.085.
EUR/USD Technical analysis
EUR/USD is trying to break through the lower Target zone of 1.0962 - 1.0936. If the pair strengthens lower, then the next target of the bears will be the Golden Zone 1.0878 - 1.0869. If sellers break through the Golden Zone, the price can fall to the Target Zone 2, 1.0794 - 1.0777.
If the Target zone of 1.0962 - 1.0936 is held by buyers, then EUR/USD will go into an upward correction. In this case, we will wait for testing of the resistance area 1.1003 - 1.0996 or 1.1058 - 1.1044. From these levels, it will be possible to consider new sales with a goal in the area of yesterday's minimum.
GBP/USD continues to decline and is approaching the level of 1.3020. Investors are focused on fresh data from the UK, of which there were quite a lot this week. Inflation slowed significantly in September: the annual consumer price index fell from 2.2% to 1.7%, which is lower than the projected 1.9%. The monthly figure also dropped to 0.0%, although 0.1% was expected. Core inflation decreased from 3.6% to 3.2%, with a forecast of 3.4%.Investors continue to analyze the report on the UK labor market, published earlier. The number of applications for unemployment benefits increased from 23.7 thousand to 27.9 thousand, which exceeded forecasts of 20.2 thousand. However, the employment rate in August increased significantly from 265,000 to 373,000, and unemployment fell from 4.1% to 4.0%. At the same time, the average wage growth, including bonuses, decreased to 3.8%, and without them — to 4.9%.The US currency experienced some pressure after weak data on activity in the manufacturing sector in New York. The index fell from 11.5 to -11.9 points, which turned out to be much worse than expected. Data on retail sales and industrial production in the United States are scheduled for tomorrow, which may show growth.On the GBP/USD Daily chart, the indicators do not give a clear signal. The Bollinger band indicator indicates a narrow range and mixed dynamics. The MACD indicator gives a buy signal, and the Stochastic shows steady growth.Sales can be considered after a confident breakdown down the 1.3000 level with a target of 1.2900. We will move the stop loss to the level of 1.3050.In the case of a rebound from 1.3000 and an upward breakdown of the key resistance of 1.3050, we consider purchases with a target of 1.3150. We will set the stop loss at 1.3000. 
FOREX Fundamental analysis for EUR/USD on October 16, 2024Trump returns to the stage. Despite the positive data from Germany and the EU, the EUR/USD exchange rate continues to fall. Donald Trump, again leading in the polls, is actively promoting the idea of introducing new customs tariffs, which causes risks of renewed trade wars and pushes investors to protective assets, primarily the US dollar.Data on the Eurozone remains weak against the background of steady growth in the US economy. Despite the fact that the European economy showed relative stability in 2024, investors see that the region's problems are accumulating. The contrast in economic development between the United States and the Eurozone has led to a revision of interest rate expectations. The US Federal Reserve (FRS) is likely to cut rates more slowly than expected, while the European Central Bank (ECB), on the contrary, may accelerate monetary expansion. This dynamic strengthens the dollar's position in forex currency tradingThe situation is also complicated by potential innovations that Trump may introduce as president of the United States. Markets suggest that such measures may lead to higher inflation and a slowdown in the Fed's rate cuts, which will only strengthen the dollar among other forex currency indices. The increase in Trump's popularity attracts investors who turn to the greenback again, which further presses the euro.In addition, the news that Israel does not plan to attack Iran's oil infrastructure led to lower oil prices and reduced the risks of a new round of inflation, which also put pressure on EUR/USD. The pair's fall in recent weeks is also due to concerns about possible actions by the ECB at the October 17 meeting. The ECB is expected to cut the rate by 25 basis points to 3.25%, but the weakness of the Eurozone economy and the risks of recession may require more decisive steps.Nevertheless, there are "hawks" inside the ECB who can persuade the leadership to neutral rhetoric, which will support the euro. It is believed that if the ECB limits itself to only a modest rate cut, this may be a signal for short-term purchases of EUR/USD, especially if the exchange rate rises above the $1.0915 mark. However, investors should be on their guard, since the euro is still on a "bearish" trend, and one should not get carried away with long-term purchases.EUR/USD Technical analysisAs a result of the ongoing decline, EUR/USD reached the "golden zone" of 1.0878 - 1.0869. If the pair manages to break lower, then the next target of the bears in the format of a short-term downtrend will be the target zone 2 1.0794 - 1.0777. If the "golden zone" is held by buyers, then an upward correction may begin.In case of a corrective recovery, we are waiting for EUR/USD in the resistance area 1.0980 - 1.0971 or 1.1033 - 1.1019. After testing these zones, we will consider new sales of the instrument with the main goal in the area of today's minimum. 
On Tuesday, AUD/USD shows a smooth decline and tests the level of 0.6710 for a breakdown downwards. Yesterday, the instrument was also under pressure and reached new local lows since October 10, before the bulls temporarily regained some of the lost positions.The main pressure on the pair at the beginning of the week was exerted by economic data from China, which increased concerns about a slowdown in the Chinese economy. The volume of exports in September decreased from 8.7% to 2.4%, which was lower than the forecast of 6.0%. Imports also slowed from 0.5% to 0.3%, while analysts expected 0.9%. As a result, China's trade surplus decreased from $91.02 billion to $81.71 billion, which also turned out to be worse than forecasts.Earlier, China published inflation data for September. The consumer price index decreased from 0.6% to 0.4% year—on-year, and from 0.4% to 0.0% on a monthly basis. The producer price index fell by 2.8% year-on-year after a previous decline of 1.8%. These data reinforce concerns about the stagnation of China's economy, despite government stimulus measures that have so far produced only limited results.On Thursday, Australia will publish labor market data for September: employment growth is expected to slow from 47.5 thousand to 25.0 thousand, while the unemployment rate is projected to remain at 4.2%. On the same day, statistics on applications for unemployment benefits, retail sales and industrial production will be released in the United States. Retail sales are expected to grow from 0.1% to 0.3%, while industrial production will decline by 0.1% after an increase of 0.8%.On the daily chart, the Bollinger band indicator shows a steady decline. The MACD indicator continues to give a sell signal. Stochastic, on the contrary, shows an upward trendShort positions can be considered after a confident breakdown down the 0.6700 level with a target of 0.6622. We will set the stop loss at 0.6732.If the price bounces off the 0.6700 level and breaks through the 0.6732 mark, we will get a buy signal with a target of 0.6800 and a stop loss at 0.6700. 
FOREX Fundamental analysis for EUR/USD on October 15, 2024If the Federal Reserve surprised financial markets by lowering the federal funds rate by 50 basis points, then why shouldn't the European Central Bank (ECB) follow suit? Before the Fed meeting in September, few expected such a drastic step, and now many analysts consider the reduction of the ECB deposit rate from 3.5% to 3.25% to be a practically solved issue. However, rumors that the ECB may make an even more significant reduction caused the EUR/USD exchange rate to fall below the 1.09 level.In the decade leading up to the pandemic, which is often called "lost" for Europe, the ECB made tremendous efforts to deal with deflation. For 93 of the 120 months to July 2021, inflation remained below the 2% target. The ECB was forced to introduce unconventional measures such as quantitative easing programs and negative interest rates.The COVID-19 pandemic, despite all its negative consequences, has given the ECB the opportunity to rectify the situation. Gaps in supply chains led to an increase in inflation above 10%, which allowed the Central Bank to raise loan rates to 4%. The ECB has already lowered rates twice in 2024, but the accelerating return to deflation indicates that these steps may not be enough.The economic weakness of the Eurozone is obvious, and the situation could worsen if Donald Trump becomes president of the United States again. His trade wars will hit the export-oriented economies of the Euroblock, and his intention to stop supporting Ukraine will lead to the fact that Europe will have to finance assistance to Kiev from its own resources.Europe must avoid a return to deflation, and accelerating monetary easing, including a 50 basis point reduction in deposit rates, may be the solution expected on October 17th.At the same time, the Fed intends to act more cautiously. As Christopher Waller said, after decisive measures in September, the Central Bank should lower rates more slowly. If inflation falls below the 2% target and the labor market weakens, easing may accelerate. But if demand or unexpected economic factors turn out to be stronger, the Fed may suspend expansion.Rumors of a possible pause in the federal funds rate cut had the same effect on the markets as the discussion of the ECB rate cut by half a percent in October. The EUR/USD pair continues to develop downward dynamics, and the bulls do not yet see an opportunity for a counteroffensive. Until the ECB's decision, the euro is likely to remain under pressure.In the current situation, it is recommended to keep short positions open above 1.12 and from 1.1045, as well as strengthen them on upward pullbacks.EUR/USD Technical analysisEUR/USD continues to decline within the framework of a short-term downtrend. The main target of sellers is the "golden zone" 1.0878 - 1.0869. After working out this area, an upward correction may develop. If the correction starts from current prices, then it will be possible to wait for the pair in the resistance areas 1.0993 - 1.0984 or 1.1046 - 1.1032. After reaching these zones, we will consider new sales with a target at yesterday's low of 1.0889. 
NZD/USD is trading sideways with almost no changes near the 0.6090 mark. The volatility of currency pairs in the market remains low, as the American stock exchanges are closed due to the celebration of Columbus Day. In the morning, data on the New Zealand economy were published, which turned out to be mixed. The Business NZ index of business activity in the service sector rose slightly from 45.5 to 45.7 points. However, the volume of retail sales using electronic cards decreased sharply by 5.6% year-on-year. On a monthly basis, the indicator remained at zero.The position of the New Zealand dollar is also affected by negative statistics from China, where the consumer price index slowed from 0.6% to 0.4% in annual terms, and fell to 0% on a monthly basis. Analysts' expectations were not met. Production inflation also worsened, falling to -2.8%, against the projected -2.5%.An important pressure factor remains the actions of the Reserve Bank of New Zealand, which last week cut the interest rate by 50 basis points to 4.75%, noting progress in reducing inflation.Investors are also carefully assessing the US inflation data, which may affect the Fed's further decisions. In September, the overall consumer price index slowed to 2.4%, while the benchmark index increased to 3.3%, which reinforced expectations of a slight rate cut in November by 25 basis points.On a technical level, the Bollinger band indicator suggests a decline, as does the MACD, while stochastic, on the contrary, indicates a possible short-term upward movement.To form short positions, it is recommended to wait for the breakdown of the 0.6082 level. The target is 0.6030. We will set the stop loss at 0.6120.A rebound from the 0.6082 level and an upward breakout of 0.6100 may be a signal for purchases. For buyers, the target is 0.6145. We will place the stop loss at 0.6075. 
FOREX Fundamental analysis for EUR/USD on October 14, 2024The state of the US dollar in 2024 can be described as "out of the fire and into the flames." At the beginning of the year, the greenback was considered a weak currency among forex currency indices, as the Fed clearly stated its intention to ease monetary policy. However, starting in April, the EUR/USD exchange rate began to decline, approaching a six-month low. Now the dollar has strengthened its position again, because against the background of the active actions of the Fed in September, investors lost the desire to sell itAfter the release of strong data on the labor market and rising inflation in the United States in September, the probability of another act of monetary expansion by the Fed by 50 basis points has almost disappeared. In early autumn, the chances of a rate cut to 3.25% by mid-2025 were approaching 80%, but by the end of September, forecasts had changed dramatically.The reason for such hesitations was the Fed's dependence on macroeconomic data, and this is clearly visible in forex currency trading. Investors' sensitivity to statistics has peaked, which was reflected in the index of economic surprises, the dynamics of EUR/USD and expectations for the Federal Reserve rate. In the summer, it seemed that the US economy was slowing down, but September data allowed the Atlanta Federal Reserve to raise its GDP forecast for the third quarter from 2% to more than 3%.This dependence on data is like driving a car only through a rear-view mirror. It is clear that this is not the best way to predict. Some experts, such as 68% of Wall Street Journal analysts, believe that inflation under Donald Trump will be higher than under Kamala Harris, which is also important to take into account in long-term forecasts.The European Central Bank (ECB) has also changed its position. Back in September, a reduction in the deposit rate was not planned, and now the probability of its fall to 3.25% at the meeting on October 17 is growing day by day. The reason is the weakness of the Eurozone economy and the fall in inflation to 1.8%. This puts pressure on EUR/USD. At the same time, statements by ECB President Christine Lagarde may become unexpectedly "hawkish", which will lead to the closure of short positions on the pair.In addition, the Eurozone is facing the threat of a return of deflation, which has proved more difficult to deal with than rising prices. This could lead to a reduction in the ECB rate to 2% by 2025. In this regard, the trend for EUR/USD remains downward, and the most reasonable forex trading strategy would be to sell EUR/USD on the rise to the level of $1,085.EUR/USD Technical analysisEUR/USD is trading in a short-term downtrend. Sellers are trying to gain a foothold below the Target zone of 1.0962 - 1.0936. If the bears are successful, the decline will continue to the area of the "Golden Zone" 1.0878 - 1.0869.We will consider the entry into the EUR/USD sales on an upward correction to the resistance areas 1.1005 - 1.0996 and 1.1058 - 1.1044. As a target, we are focusing on the 1.0900 level. 
USD/CHF analysis on October 11, 2024USD/CHF is currently near the 0.8571 mark and demonstrates readiness for further growth. Nevertheless, the Swiss franc remains one of the most stable currencies among the currencies of developed countries due to strong economic indicators.The Swiss National Bank has already changed the interest rate three times this year and, according to the deputy chairman of the Central Bank, Antoine Martin, there are grounds for another act of monetary expansion by 25 basis points by the end of this year. In September, the consumer price index fell to 0.8%, the lowest level in three years, which allows the bank to adhere to the long—term goal of returning interest rates to negative territory to stimulate capital inflows into the economy.At the same time, the US dollar index is trading at 102.60, which is the highest since mid-August. The growth of the dollar is facilitated by a slowdown in inflation in the United States from 2.5% to 2.4%. A slight increase in the core consumer price index from 3.2% to 3.3% did not put serious pressure on the dollar, as this may be due to a sharp decrease in the interest rate by 50 basis points. Investors expect the Fed to cut rates twice more by the end of the year, both times by 25 basis points, although San Francisco Fed President Mary Daley warned that there may be fewer adjustments. It all depends on the economic data.Technical analysis shows that the USD/CHF pair breaks through the upper limit of the channel 0.8550–0.8390. The main forex indicators indicate continued growth: fast EMA lines cross the signal line upwards, and the AO histogram shows ascending signals.After fixing the price above 0.8610, it is recommended to open long positions with a target of 0.8750. We will set the stop loss at 0.8540.Sales are possible if the price falls below 0.8530. In this case, the target will be 0.8400. We will place the stop loss at 0.8600 
During the Asian session on Friday, AUD/USD continues to decline and is trading near the level of 0.6745, remaining under pressure from weak Australian economic data.According to a report by the Australian Bureau of Statistics (ABS), total business activity decreased by 0.7% in August. The decline occurred in seven sectors, with mining (-3.5%) and media (-2.9%) showing the largest declines. At the same time, construction (1.3%), energy (1.2%) and services (1.5%) showed growth. Compared to last year, positive dynamics is observed in twelve of the thirteen sectors, with leaders in the energy sector (17.6%) and the media (8.6%). The only industry that showed a decline over the year is the mining industry (-5.9%).The US dollar index, on the contrary, remains in an uptrend and is trading at a maximum of 102.60. This is due to the adjustment of the September consumer price index — the monthly change was 0.2%, and the annual decrease from 2.5% to 2.4%. On the contrary, the base index excluding volatile categories increased from 3.2% to 3.3%. This may affect the Fed's decision to cut the interest rate at the November meeting in favor of 25 basis points instead of 50.On the daily chart, the AUD/USD pair is located near the support line of the channel with the boundaries of 0.7000–0.6700.Technical indicators indicate a strengthening of the sell signal. The fast EMA lines on the alligator begin to cross the signal line, and the awesome oscillator indicator drops into the sales zone.We will consider short positions after the price settles below 0.6710. We consider 0.6580 to be the nearest target. We will set the stop loss at 0.6760.Purchases can be opened when the price is fixed above 0.6780 with a target of 0.6910 and a stop loss at 0.6720.