EURUSD Forecast: Is This a Double Top?
Key Events
- Eurozone Flash CPI dropped from 2.2% to 1.8%
- Eurozone Core CPI dipped from 2.8% to 2.7%
- US ISM Manufacturing PMI stabilized at 47.2
- JOLTS Job Openings increased from 7.71M to 8.04M
Coming Up
- FOMC Member Speeches
- ADP Non-Farm Employment Change
- US Unemployment Claims (Thursday)
- ISM Services PMI (Thursday)
- Non-Farm Payrolls (Friday)
- Unemployment Rate (Friday)
Source: CME Fed Watch Tool
Recent US data has shifted rate cut expectations towards a 25-bps cut in November, now at 63.2%. Interestingly, the 25-bps cut is now viewed as a bullish factor for the US Dollar, while a 50-bps cut is seen as dovish.
Key factors:
- Jerome Powell’s speech affirming the economy’s strength with no fixed timeline for rate cuts
- A 330K rise in JOLTS Job Openings, boosting confidence in the job sector
This stability in the dollar, combined with a dovish tone from the Eurozone after a sharp drop in CPI estimates, has kept the EURUSD below the critical 1.1220 resistance level. Upcoming ISM Services PMI and Non-Farm Payrolls will likely influence rate cut expectations and October trends.
Technical Outlook
EURUSD Forecast: EURUSD – 3-day Time Frame – Log Scale
Source: Tradingview
With a double rebound from the 1.12 resistance zone, the EURUSD appears to be forming a potential double top, though confirmation is still pending. If the pair closes below 1.10, it could solidify the pattern, extending the drop toward the 1.09 support, and a break below that could push it further to 1.08-1.0780.
Alternatively, a rebound from 1.09 could maintain the bullish trend, aligning with the trendline connecting the 2023 and 2024 highs. However, a drop below 1.08 would reinforce downside risks.
High volatility risks can be expected towards Friday’s payroll data, with focus on Fed rate cut expectations, which could influence market direction, alongside escalating Middle East tensions that might strengthen the dollar as a haven.
--- Written by Razan Hilal, CMT – on X: @Rh_waves
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.
GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2024