Eurodollar Stagnates, Fed Decides to Keep Policy Rate Unchanged【November 2, 2023】
Fundamental Analysis
The US Federal Reserve (Fed) decides to keep the policy rate unchanged for the second consecutive meeting, with the Fed Chair taking a dovish stance.
US ADP employment data falls short of market expectations, pointing to a contracting US labor market.
In the forex market, the dollar weakens across the board, with the Eurodollar forming a “hammer” pattern, indicating potential buying at lower levels.
EURUSD Technical Analysis
Analyzing the daily chart of the Eurodollar, the 24-day moving average acts as support, and dips are being bought. The downside appears to be solidifying, with a gradual rise evident. Upon analyzing the Fibonacci retracement, the level corresponding to 23.6% is around USD 1.0640, which seems to act as a resistance.
If it surpasses the recent high of USD 1.0695, there is a possibility of aiming for the 240-day moving average and moving higher. Today’s US unemployment claims and tomorrow’s US employment statistics are in focus.
Day Trading Strategy (Hourly)
Analyzing the 1-hour chart of the Eurodollar, it’s forming a broad range, making the direction unclear. Despite the widespread dollar weakness, the Eurodollar isn’t that strong, and there is a significant chance of reversal.
The 240-day moving average will likely act as the recent significant resistance. If it surpasses the 240-day moving average, there’s potential to rise up to around USD 1.067. The daily technicals seem to indicate upward movement, with some bullish pressure.
For a day trading approach, one might aim to buy on dips near USD 1.0565. Enter a buy at USD 1.0565, take profit at USD 1.0635, and set a stop at USD 1.0535.
Support and Resistance Lines
The resistance line to be considered in the future is as follows
USD 1.0635 – Major resistanceUSD 1.060 – Round number
Market Sentiment
EURUSD Sell: 25% Buy: 75%
Today’s Important Economic Indicators
Economic Indicators and EventsJST (Japan Standard Time)UK Policy Rate Announcement21:00US Unemployment Insurance Claims21:30
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.
Risk Disclaimer
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
This analysis is for educational purposes only and does not constitute investment advice. Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results.
