FXStreet (Guatemala) – EUR/USD has been drifting to the upside, recovering from the sell-off and has resulted in a bearish flag formation.
The pair has been reacting to the interests in the greenback as the FOMC has left the door wide open for a rate hike in December, with most market participants suggesting the Fed has little choice but to make a move.
The two key components that the FOMC will monitor are the jobs data and inflation. We will have eyes on the Nonfarm Payrolls next month and continue to monitor inflation.
Full text October FOMC statement
However the miss today in PCE Q3 may not be strong enough if the FOMC are looking for absolute confidence that the 2% target is reachable in the near future. However, as analyst at the Bank of Tokyo Mitsubishi noted the underlying picture is pointing to a rise, not a fall of inflation in time to come.
EUR/USD levels
EUR/USD is technically supported before the 1.0855 6th Aug lows and 1.0808 19th July low. While price remains below the 200 DMA, at 1.1109 currently, downward pressures should persist into month end, capping any further recovery attempts below 1.1100.
“Being the last day of the month, investors may take some profits out of the table this Friday although sellers will likely add at higher levels, ” Valeria Bednarik==<==/a>, chief analyst at FXStreet suggested.
(Market News Provided by FXstreet)