

Market Analysis
EURUSD
Prediction: Potential for Increase
Fundamental Analysis:
The EUR/USD is struggling to gain traction, hovering near 1.1150 as markets await a key EU inflation report on Tuesday. Investors are also focused on the upcoming Non-Farm Payrolls (NFP) data. The pair experienced a sharp drop after peaking above 1.1200 on Friday, retreating by nearly a cent to around 1.1110 by the close of Monday’s North American session. This decline coincided with a rebound in the U.S. Dollar, which recovered from a dip to 100.15, driven by rising U.S. yields.
Despite China’s recent stimulus measures, risk-sensitive assets remained subdued. Market participants anticipate further rate cuts from the Federal Reserve in November and December, while the European Central Bank continues to grapple with high inflation. If the Fed moves forward with additional rate cuts, it could bolster EUR/USD. However, expectations of stronger U.S. economic performance relative to Europe may limit any significant dollar weakness.
Technical Analysis:
If EUR/USD pushes higher, it will face initial resistance at 1.1214, the 2024 high, followed by the 2023 peak of 1.1275. On the downside, the first target is the 55-day SMA at 1.1019, then the September low of 1.1001, with further support at the weekly low of 1.0881.
The overall uptrend is expected to remain intact as long as EUR/USD stays above the critical 200-day SMA at 1.0874. On the four-hour chart, bearish momentum has returned, with resistance levels at 1.1214 and 1.1275. Support levels are seen at 1.1113, the 200-SMA at 1.1101, and 1.1082, while the relative strength index (RSI) has dipped to around 45.
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