November 3th, Market participants take a wait and see position before the meeting of the US Federal Reserve


On Tuesday, November 2, trading at the euro rate ended in decline. The EUR/USD pair dropped 0.23% to 1.1579. Investor sentiment in the foreign exchange market deteriorated in trading in Asia after the publication of the RBA's monetary policy decision, which showed a dovish sentiment. Stock indices traded slightly in the red.

The fall in the Aussie and the New Zealander strengthened the demand for safe currencies (franc, yen and dollar). In the American session, the euro fell to 1.1575. The euro was supported by pound sales during the day due to fishing demand between France and the UK.

Manufacturing PMIs for October were mixed. Germany's score was lowered to 57.8 from 58.2, and the EU's score was lowered to 58.3 from 58.5. Supply disruptions remain a major concern for the German economy at the start of the 4th quarter.

Scheduled statistics (GMT +3):

  • At 10:00, UK is to publish Nationwide House Price Index for October.
  • At 12:30, in the UK will be released the index of business activity in the service sector (final data) for October.
  • At 13:00, Eurozone is to publish data on unemployment for September.
  • At 15:15, the US is to publish a report on changes in the number of employees (excluding agriculture) according to the ADP data for October.
  • At 17:00, in the US will be released the index of business activity in the non-manufacturing sector from ISM for October, the volume of industrial orders for September.
  • At 17:30, the US Department of Energy will publish data on oil reserves for October 22-29.
  • At 17:45, the US is to publish the October Manufacturing PMI from Markit
  • At 21:00, the US Federal Reserve will announce its decision on the interest rate, at 21:30 there will be a press conference by the FRS chairman.

Current situation:

At the time of writing this review, major currencies are trading in positive territory. Currency pairs are correcting after yesterday's drop. Market participants take a wait-and-see attitude before the US Federal Reserve meeting and George Powell's speech.

Experts expect a $ 10-15 billion cut in the bond purchase program. These values have already been taken into account in prices, so you need to be prepared for the market's backlash (weakening of the dollar) to the regulator's decision to start phasing out the QE program.


Technical analysis:

The EUR/USD pair dropped from 1.1613 to 1.1575. The price for fourteen hours is consolidating in a narrow range of 1.1575-1.1590. The cross is decreasing, so there are risks of going down to the level of 1.1563. Since an important event is scheduled for Wednesday, we expect low activity on the market and price fluctuations in a limited range until 21:00 (GMT +3). During J. Powell's speech, the movement can reach 100 points.

Summary: on Tuesday, the euro closed down. The price was correcting against the background of the general strengthening of the dollar and risk aversion. Now market participants are taking a wait and see attitude before the US Federal Reserve meeting and John Powell's speech. Volatility spike is expected after 21 (GMT +3)

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