Markets Analysis

Eurodollar Stagnates, Fed Decides to Keep Policy Rate Unchanged【November 2, 2023】

November 02, 2023

Markets Analysis

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 resistance
USD 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 Announcement21:00
US Unemployment Insurance Claims21:30

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

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