Eurozone CPI Nears 2%, Major Rate Cut Expectations Fade【November 1, 2024】

Fundamental Analysis

• EURUSD extends gains for the second consecutive day, with the Eurozone CPI rising to 2%, up from September’s 1.7%.
• Reduced expectations for a major rate cut by the ECB have led to Euro buybacks.

EURUSD technical analysis

Analyzing the daily chart of EURUSD, the pair is trading above the 10-day moving average and nearing the 26-day moving average. With the Eurozone inflation rate reported at 2.0%, an increase from September’s 1.7% and above market expectations, rate cut forecasts have weakened, driving further Euro buybacks.

RSI analysis shows it moving above 30 and stabilizing around 48. If RSI reaches 50, selling pressure may intensify, marking a potential reversal point. Attention should be on whether the 26-day moving average functions as resistance.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of EURUSD, the pair rebounded off the 26-period moving average, suggesting an uptrend along the rising trendline. RSI (14) currently stands at 64, maintaining a solid upward momentum.

The 1.089 USD level, backed by the daily 26-day moving average, may act as a significant resistance point, with a possibility of heightened selling pressure.

For a day trading strategy, consider an entry when the 1-hour RSI exceeds 70 and then dips below again. A sell entry is recommended near 1.09 USD, with a target exit at 1.085 USD and a stop loss at 1.0925 USD.

Support/Resistance lines

The following are key support and resistance lines to consider:

• 1.09 USD – Round number resistance

Market Sentiment

EURUSD Sell: 19% Buy: 81%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.