Today’s Forex currency environment, particularly focusing on the EUR/USD pair, is influenced by several key economic data points and central bank speeches.
Economic Data Impacting the EUR/USD:
- Eurozone Producer Price Index (PPI): The October PPI data for the Eurozone showed a monthly decrease of 0.1% and a yearly decrease of 11.0%. This indicates a slowing inflationary pressure in the Eurozone, which could impact the Euro’s value.
- Current Account Balance: The September Balance of Payments data for the Eurozone showed a current account deficit of 404.3 million Euros, contrasting with the previous month’s surplus of 497.7 million Euros. This shift towards a deficit could signal economic challenges in the Eurozone.
- Construction Orders and Unemployment Rate: There was a slight month-on-month increase in construction orders by 0.4% in September, but a year-on-year decline by 0.3%. Additionally, the unemployment rate for October rose to 5.6%, up from 5.5% in the previous month, which could reflect underlying labor market challenges in the Eurozone.
Central Bank Speeches:
- European Central Bank (ECB): ECB Executive Board members Luis de Guindos, Elizabeth McCaul, and Andrea Enria are scheduled to speak. Their comments on the Eurozone economy, inflation, and monetary policy will be crucial for traders and investors as they provide insights into the ECB’s future policy directions.
- Federal Open Market Committee (FOMC): From the U.S. side, Fed Vice Chair John Williams and FOMC voting members Michael Barr, Lorie Logan, and Christopher Waller will be speaking. The market will closely watch their comments for clues on the future direction of U.S. monetary policy, particularly regarding interest rate movements.
Given this backdrop, your belief that the EUR/USD pair has hit resistance and is likely to reverse lower towards the 1.09000 – 1.08500 range seems to align well with the current economic and policy environment. The pressures mounting in Europe, as evidenced by the economic data, could indeed weaken the Euro. Meanwhile, the Federal Reserve’s ongoing tightening cycle and the upcoming speeches by key FOMC members might continue to support the USD in the short term. My goal is to sell from the 1.09500 range with a SL of 1.09660 and TP around 1.09050.
