EUR/USD Awaits FOMC Decision Amid Inflation Slowdown and Interest Rate Speculations
The EUR/USD currency pair is stable as the financial markets eagerly await the Federal Open Market Committee’s (FOMC) upcoming policy decision. Most people expect the current 5.5% interest rate to be kept in place at the November meeting. In the midst of the Asian trading session on Wednesday, the pair is seen trading modestly lower, lingering around the 1.0570 mark.
A recent report divulged a marked deceleration in the Eurozone Harmonised Index of Consumer Prices (HICP), which descended from a yearly rate of 4.3% to 2.9% in October. This pronounced slowdown in inflation is in harmony with prevailing market projections, which suggest that the European Central Bank (ECB) may refrain from additional interest rate hikes. Furthermore, the specter of an impending recession continues to cast a shadow over the EUR/USD pair’s prospects.
The currency pair may encounter a foundational level of support near the psychological threshold of 1.0550, succeeded by the nadir of the previous week at 1.0521. Should the pair decisively penetrate the latter support, it may set the stage for an augmented downward trajectory toward the pivotal 1.0500 juncture.
The Moving Average Convergence Divergence (MACD) indicator resides beneath the midpoint yet above the signal line, insinuating a potential alteration in market momentum. This subtle indication of market sentiment suggests an amalgamation of factors that could herald a shift in the prevailing directional trend.
Market participants will intently scrutinize the FOMC’s post-meeting declarations to discern the prospective trajectory of interest rates. Any dovish overtones could catalyze an upward movement in the pair, propelling it towards a crucial resistance near the 23.6% Fibonacci retracement level at 1.0648, with subsequent resistance posed by the 50-day Exponential Moving Average (EMA) at 1.0650.
A decisive breach above these resistance echelons could reinvigorate the EUR/USD pair, potentially prompting a revisit to October’s zenith at the 1.0694 threshold.
Nonetheless, the pair appears to be grappling with subdued momentum, as evidenced by the 14-day Relative Strength Index (RSI) dwelling below the median level of 50, indicative of bearish momentum and mirroring a predilection towards a dampened market sentiment.
EUR/USD Live Chart
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