U.S. Dollar Extends Its Declines
The U.S. dollar has lost nearly 0.8% from last week’s high, pressured by several factors. Most notably, markets have increased their expectations for a 25–basis point rate cut by the Federal Reserve in the upcoming December meeting, especially after comments from FOMC member John Williams, who suggested that a rate cut may be possible. The dollar also weakened following disappointing U.S. retail sales data for September, released yesterday, which showed a 0.1% contraction compared to expectations of a 0.3% increase. In addition, U.S. consumer confidence for November missed estimates, coming in at 88.7 versus 93.5 expected.
What Are Markets Watching Today
Markets are awaiting the release of U.S. durable goods orders for September, which are expected to show 0.5% growth, along with U.S. weekly jobless claims for November. Traders are closely monitoring unemployment claims for clearer insight into current U.S. labour market conditions; any increase in claims would add pressure on Federal Reserve members to continue easing monetary policy in the coming period.
Across the Atlantic, markets await remarks from ECB President Christine Lagarde for further clarity on the central bank’s policy stance, especially after the ECB paused its easing cycle. Markets currently expect the ECB to keep rates unchanged at its final meeting of the year in December.
EUR/USD – Technical Analysis
On November 21, the EUR/USD pair corrected its upward trend, forming a higher low at 1.1490. The pair is currently trading below the 50-day simple moving average and is approaching a test of the downward trendline originating from the October 1 high. A breakout above this trendline may increase the likelihood of a move toward the high end of the current trading zone between 1.1664 and 1.1483. A daily close above this zone could encourage bullish momentum, potentially driving the pair toward 1.1860. In this scenario, the resistance zone between 1.1715 and 1.1754 should be closely monitored.
Key Levels to Watch in the Opposite Scenario
A daily close below 1.1483 would signal the pair’s return to a bearish trend, with a possible decline toward 1.1309. In this scenario, the support area between 1.1386 and 1.1344 should be considered carefully.
EUR/USD – Daily Price Chart
