Yesterday, Federal Reserve Chairman Jerome Powell delivered a speech. From his message, it became clear that the Fed will raise the rate by 0.50% at the December meeting (on the 14th) in order to avoid recession as an effect of the rate hike being too fast, although he confirmed that the tightening period itself may take longer and the final rate higher.
Also, according to ADP data, there were 127,000 jobs created in the private sector in October against expectations of 200,000. As a result, the dollar index lost 0.79% and the euro gained 0.77% (76 points).
Now the euro will try to break through the nearest resistance at 1.0470 and reach the target range at 1.0615/42. Investors are already focusing on the weaker employment data than the economists’ consensus forecast (200,000 nonfarm) suggests.
As a consequence, if the price rises quickly, a divergence at a flatter angle is possible (dashed line on the chart). If the price settles above the target range, the growth may extend to the next target range at 1.0758/87 to the support area of April 14-19 and resistance on May 30. But we look at such growth with doubts, since the current growth since September is still a correction.
On the four-hour chart, the price crossed the MACD line, and the Marlin oscillator has moved into the positive area. We expect the price to reach the nearest range of 1.0470/90, where the price was staying on November 28. Staying above the range opens the way to 1.0615/42. Of course, if tomorrow’s US labor data turns out to be weak. If results come out strong, then the euro might confuse traders in a sideways trend for another two weeks, until the Fed meeting.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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