empty
20.11.2024 03:22 AM
Overview of EUR/USD Pair on November 20: Eurozone Inflation Fails to Surprise, and So Does the Euro

This image is no longer relevant

The EUR/USD currency pair continued to trade below the moving average line on Tuesday. While it avoided another drop this time, the price still struggles to stage even a minimal correction. This situation highlights several critical points: The absence of significant buying interest suggests that market participants are not inclined to push the euro higher. The euro remains highly overbought, lacking substantial demand. Our conclusions and forecasts throughout the year's first half appear accurate. We continue to expect a medium-term decline for the euro.

On Monday, European Central Bank President Christine Lagarde delivered a speech, followed by Tuesday's Eurozone inflation report for October. While these events might seem significant at first glance, they ultimately had little impact on the euro. Lagarde refrained from discussing monetary policy, and the inflation report, being the second estimate, rarely deviates from the initial numbers. Thus, neither event influenced market sentiment.

The market continues to be driven by global factors we've repeatedly highlighted. These factors are unlikely to change in the short term. It would also be useful to recall global technical factors. For example, in the weekly timeframe, the pair has been trapped in a horizontal channel for nearly two years. The global downtrend, lasting 16 years, remains intact. Given these conditions, significant downward movements are far more likely. If the pair exits the flat trend, it will likely do so through the lower boundary, and the current price is near this level.

While the fundamental backdrop could change, imagining a scenario where the market starts abandoning the dollar is difficult. Under Donald Trump, U.S. policy is expected to be inflationary, and the Federal Reserve is likely to lower rates less aggressively than anticipated. Furthermore, the pace of rate cuts has already been slower than the market priced in. The euro's two-year rally has merely been a correction, and we anticipate further declines toward the 1.00–1.02 range. With limited news this week, we don't expect sharp movements or reversals. Even crossing above the moving average remains a significant hurdle for the euro.

This image is no longer relevant

The average volatility of the EUR/USD pair over the last five trading days, as of November 20, is 80 pips, indicating "average" activity. On Wednesday, we expect the pair to trade between 1.0505 and 1.0665. The higher linear regression channel is directed downwards; the global downtrend is still intact. The CCI indicator entered the oversold area, warning about the beginning of a new round of correction, but the round of correction turned out to be weak and has already been completed. A new bullish divergence has been formed at this time, which again warns of a correction, but the price cannot go even above the moving average.

  • Support Levels:
    • S1: 1.0498
    • S2: 1.0376
    • S3: 1.0254
  • Resistance Levels:
    • R1: 1.0620
    • R2: 1.0742
    • R3: 1.0864

Trading Recommendations:

The EUR/USD pair maintains its downtrend. Over the past months, we have reiterated expectations for the euro to decline in the medium term, fully supporting the bearish trend. While the market may have already factored in most, if not all, future Federal Reserve rate cuts, there is still little reason for the dollar to experience a medium-term decline, although there were few of them before. Short positions remain relevant with a target of 1.0498 if the price remains below the moving average. For those trading based solely on technicals, long positions are possible if the price breaks above the moving average, with targets at 1.0665 and 1.0742. However, we currently do not recommend long positions.

Explanation of Illustrations:

Linear Regression Channels help determine the current trend. If both channels are aligned, it indicates a strong trend.

Moving Average Line (settings: 20,0, smoothed) defines the short-term trend and guides the trading direction.

Murray Levels act as target levels for movements and corrections.

Volatility Levels (red lines) represent the likely price range for the pair over the next 24 hours based on current volatility readings.

CCI Indicator: If it enters the oversold region (below -250) or overbought region (above +250), it signals an impending trend reversal in the opposite direction.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/JPY: What Are the Prospects for Further Growth?

This week, the EUR/JPY pair has been showing a steady recovery from its lowest level seen since September 2024. Today, the pair continues its upward momentum for the third straight

Irina Yanina 10:53 2025-02-12 UTC+2

Jerome Powell's Speech Fails to Impress Currency Traders

The euro and pound responded in a rather unusual way to yesterday's comments from Fed Chair Jerome Powell, who stated that the central bank sees no need to rush with

Jakub Novak 10:24 2025-02-12 UTC+2

What to Pay Attention to on February 12? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic events scheduled for Wednesday. The main highlight of the day is the U.S. inflation report, which is significant due to its direct impact

Paolo Greco 08:44 2025-02-12 UTC+2

What to Watch on February 11th? Fundamental Event Analysis for Beginners

There are no scheduled macroeconomic events for Tuesday. However, there will be two speeches by central bank governors today. The euro and the pound continue to show bearish tendencies

Paolo Greco 10:58 2025-02-11 UTC+2

GBP/JPY: Analysis and Forecast

The GBP/JPY pair is exhibiting a moderate intraday recovery, rising from levels last seen in September of last year and climbing above the key psychological level of 189.00, thereby breaking

Irina Yanina 17:55 2025-02-10 UTC+2

What to Watch on February 10th? Fundamental Events Breakdown for Beginners

There are no major macroeconomic events scheduled for Monday. As a result, low volatility and a "boring Monday" are likely—something we haven't seen on the market for quite some time

Paolo Greco 07:32 2025-02-10 UTC+2

USD/JPY. Analysis and Forecast

The Japanese yen continues to experience modest intraday losses against the U.S. dollar, following cautious comments from the International Monetary Fund (IMF). However, the decline remains limited, as expectations grow

Irina Yanina 14:07 2025-02-07 UTC+2

XAU/USD. Analysis and Forecast

Gold continues to post modest gains, hovering near its all-time high reached earlier this week. Concerns over escalating trade tensions between the U.S. and China, along with potential economic repercussions

Irina Yanina 12:21 2025-02-07 UTC+2

USD/CAD: Where Is the Pair Headed as It Struggles for a Clear Short-Term Direction?

The USD/CAD pair remains in consolidation, trading within a narrow range near the psychological level of 1.4300, while holding above the 1.4260 level, which represents the year's

Irina Yanina 12:12 2025-02-07 UTC+2

Markets Renew Fed Rate Cut Expectations for This Year (Awaiting U.S. Jobs Report Release)

This week's JOLTS job openings data showed a much larger-than-expected decline in the number of vacancies. This has fueled speculation among some market participants that labor market conditions

Pati Gani 12:06 2025-02-07 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.