FOREX Fundamental Analysis for October 30
United States GDP grew by 4.9% in the third quarter, reversing the theory that monetary tightening, in addition to lowering inflation, is putting pressure on economic growth. The 10-year bond yield rose to 5%, but its rise is no longer having as much impact on the dollar's strength. It seems that the old patterns are failing and it is not known which way EUR/USD will go now.
December is not the best month for the greenback. Since 2017, it has never rallied at the beginning of winter, and it started to weaken at the end of fall. The dollar closed four out of six Novembers in the red zone. But in 2023, geopolitics interfered in forex trading.
In addition, in late fall, the economic calendar is oversaturated, which can provoke slides in EUR/USD. The volatility of currency pairs will be off the charts at times.
This week the Fed will meet, many important reports will be released, including Non-farm Payrolls, and the key event may be the US Treasury's announcement on the volume of bond issuance. In August, it was after this announcement that the treasury yields soared to 5%, which made EUR/USD head towards parity. At that time the Treasury announced about $103 bln. Now, according to rumors, it will be about $114 bln.
But it should be taken into account that it is not August, and the yield of treasuries is no longer the main driver of the greenback growth. Moreover, the chances of a rate hike this year have fallen from 50% to 24%, although this has not affected the EUR/USD dynamics.
The market needs new roadmaps, and investors hope that this week's releases will help assets to determine the direction of movement. We are still waiting for news activity and try not to lose on volatility spikes, when the pair will move between the boundaries of the range 1.05-1.07. We believe that the methods of forex trading in the price channel are still valid.