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11.12.202311:55 Forex Analysis & Reviews: Will EUR/USD rally soon?

The Federal Reserve may begin easing its monetary policy soon in the wake of worsening labor market conditions and the overall economy. The European Central Bank seems to be leaning towards a similar decision.

The recently published data indicated that inflation in the US hit 3.2%, while in the eurozone, it reached 2.4%. Having this situation, the ECB, like the Fed, may start lowering interest rates next year amid an economic recession in the region.

Accordingly, the positions of dollar and euro equalizes, leading to a lack of clear trend, with a risk of an overall sideways trend characterized by up and down jerks amid high volatility and speculative deals. The situation will change only when the Fed begins to hint at the start of rate cuts and when the ECB demonstrates uncertainty. If this happens, EUR/USD will rally and head towards 1.1300.

In short, only a change in the position of either the Fed or the ECB will lead to a stable trend. However, the former will most likely initiate the process first, so a gradual rise in the pair can be expected.

Technical outlook and trading idea:

Exchange Rates 11.12.2023 analysis

Euro trades at the lower end of the Bollinger Bands, near the strong support level of 1.0750. The RSI lies below the 50% level, indicating a weakening downward trend. The Stochastic oscillator also began moving out of the oversold area, hinting at the possibility of a price increase, first to the level of 1.0850, and then to 1.1000.

*这里的市场分析是为了增加您对市场的了解,而不是给出交易的指示。

Pati Gani,
Analytical expert of InstaSpot
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