In the case of a downward trend
- Take a short trade in EURUSD and set your take profit order at 1.0092.
- Set your stop loss at 1.0400.
- Schedule: one or two days.
In the upward trend
- Take a long trade in the EURUSD currency pair and set the take profit order at 1.0350.
- Set your stop loss at 1.0200.
The EUR/USD price continued to slide lower on Monday as focus turned to the minutes of the upcoming Federal Open Market Committee meeting. It fell to 1.0227, the lowest level since November 11th. It fell more than 2% as the US dollar rebounded.
Focus on the Federal Reserve
The EUR/USD exchange rate fell on Monday and Tuesday morning as investors refocused on the Federal Reserve. The Fed will publish the minutes of its closely watched previous meeting on Wednesday. These minutes will provide more information regarding the deliberations among Fed officials.
There will be no major economic data from the United States and the European Union on Tuesday. Therefore, the pair will react to important data from several Fed officials. Loretta Meester, Esther George, and James Pollard will deliver their statements on Tuesday.
In previous statements, some of these speakers were in favor of a pivot given that inflation has started to ease recently. On the other hand, James Bullard remained committed to raising interest rates.
The comments of these Fed officials come a few days following the US released encouraging inflation data. These figures showed that the headline inflation rate fell from 8.3% in September to 7.7% in October.
The inflation picture improved on Monday as the price of Crude Oil fell to a 10-month low on Monday. Brent collapsed to $87 while West Texas Intermediate (WTI) crude oil collapsed following rumors that Saudi Arabia is considering increasing production before Europe bans Russian oil.
Another catalyst for the EURUSD rate will be the statement of Joachim Nagel, President of the German Central Bank. He is likely to provide more information regarding what the ECB will do in the upcoming meetings. The pair will also react to the recent European Consumer Confidence and Current Account data.
Forecasts for trading the EUR/USD currency pair
The price of the euro currency pair fell once morest the US dollar in the evening session. As it retreated, the pair moved below the 25-day and 50-day moving averages. It also dropped slightly below the important support 1.0284, which was the neckline of the head and shoulders pattern.
The Relative Strength Index (RSI) has fallen below 40. Therefore, the pair is likely to continue falling as sellers target the next major support at 1.0092, the October 27th high. A move above the resistance at 1.0290 will invalidate the trend to the downside.
