Eurodollar Stagnates, Fed Decides to Keep Policy Rate Unchanged【November 2, 2023】
November 02, 2023
- 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
EURUSD Sell: 25% Buy: 75%
Today’s Important Economic Indicators
|Economic Indicators and Events||JST (Japan Standard Time)|
|UK Policy Rate Announcement||21:00|
|US Unemployment Insurance Claims||21:30|
*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.