The last week has been particularly bearish for the pair EUR/USD, which marked a low to 1.1070 Friday, after a summit in 1.1180 Monday morning.
Concerns about the Brexit, and a rebound in the Dollar against multiple currencies of Forex explained at least in part, the weakness of the Euro-Dollar.
But if last week seemed to be charged, including the last meeting of the ECB, chaired by Mario Draghi before he was replaced by Christine Lagarde at the end of the month, this new week will be even more, with an economic calendar particularly dense.
Many of the critical events for EUR/USD this week
The most important event of the week will undoubtedly be the Fed meeting on Wednesday evening, which should according to the market’s expectations give rise to a further rate cut of 0.25%. It should also be noted that the barometer of the Fed funds rate Investing.com displays a probability of 93% for this rate cut.
But while the outcome of the meeting is already widely anticipated, and therefore built-in to courses, details about Powell and the FOMC statement could have a very strong influence on the exchanges, suggesting that further declines are to be expected, or on the contrary by implying that the adjustment in the middle of the cycle is now completed.
Before the Fed meeting, investors will also take into account the preliminary figures of GDP Q3 in the United States. The growth is expected to slowdown to 1.7%, after 2% in the previous quarter. Negative data would be available to the likelihood of the US economy to enter a recession in 2020, as feared by many economists.
Thursday, what are the growth data of the euro area that will be of interest to the traders. The GDP is expected to increase by 1.1% in annual data for the Q3, after 1.2% in Q2. The CPI preliminary in the month of October will be expected simultaneously, and is expected to show stable at 0.8% month-over-month, according to consensus forecasts.
Finally, the day of Friday will be the occasion of the publication of two statistics US particularly important : The report to the NFP on job creation in the month of October, and the ISM manufacturing index for the month of October.
The report NFP is expected to report a net slowdown in the creation of jobs, 90k against 136k the previous month, in part because of the strikes extended at the car manufacturer General Motors (NYSE:GM). The unemployment rate is also expected to increase, to 3.6% against 3.5% the previous month, and average hourly wages are expected to slow their growth to 0.3% month-over-month after a 0.4% increase the previous month.
The ISM manufacturing index is expected to improved to 48.8 points after 47.8 earlier. Note, however, that as long as it remains under the bar of 50 points, the ISM index reflected a contraction in manufacturing activity US.
Technical analysis EUR/USD
From a graphical point of view, it should be noted that the decrease shown by the EUR/USD for a week becomes sufficient to call into question the uptrend from the bottom.
The Euro-Dollar is, in effect, passed under its moving averages 100 and 200 hours in the last week, and has also broken below the upward trend line that supported the course since the 1st of October.
It should also be noted that the moving average 100 hours is about to cross below the moving average 200 hours, which would be a bearish signal if it is confirmed in the course of the next few hours.
Finally, taking a step back on the daily chart, we note that the pair EUR/USD has been rejected under the moving average 100 days after having tested it during 3 sessions. This indicator, currently at 1.1130, will be considered as the first key resistance.
Downward 1.1050-60 area is a zone of support which is credible, but a test of the psychological threshold of major 1.10 is not excluded.