EURUSD – Up
Events to watch out for today:
15:30 EET. USD – Retail Sales
EURUSD:
EUR/USD broke a five-day losing streak, trading near 1.0540 during the Asian session on Friday. This rebound is likely due to a downward correction in the US Dollar (USD) following comments from Federal Reserve Chairman Jerome Powell. Powell stated that the recent performance of the US economy has been “surprisingly good”, allowing the Federal Reserve the flexibility to gradually lower interest rates.
In addition, the US producer price index (PPI) rose 2.4% year-on-year in October, up from a revised 1.9% increase in September (previously 1.8%) and beating market expectations of 2.3%. Meanwhile, the core producer price index, which excludes food and energy, rose 3.1% year-on-year, slightly above the 3.0% forecast.
European Central Bank (ECB) board member Isabel Schnabel said on Thursday that interest rate changes should remain the ECB’s main policy tool, while bond purchases and forward guidance should be used more sparingly.
ECB reports from the October monetary policy meeting indicate that rate cuts are increasingly being considered. However, ECB officials remain cautious about domestic inflationary pressures, citing high wage growth and sluggish labor productivity. The ECB has emphasized the need to gather more data before making any policy changes.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
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