EURUSD declines again, with the US dollar bolstered by the Fed

The EURUSD pair is losing ground. The market can now take a slight respite following the Federal Reserve’s decision. Find out more in our analysis for 8 November 2024.

EURUSD forecast: key trading points

Fundamental analysis

The EURUSD rate declined to 1.0782 on Friday.

Yesterday, the US Federal Reserve reduced the interest rate by 25 basis points to 4.75% per annum. Federal Reserve Chair Jerome Powell signalled to the markets the intention to cut borrowing costs further. The Fed’s balance sheet will continue to decrease at the current rate by 25 billion USD per month. Depending on economic conditions, the Federal Reserve may accelerate or slow the pace of interest rate cuts. However, the regulator will take a more active approach if unemployment rates deteriorate.

The market has received all crucial data. While investors will take time to assess it fully, the volatility peak is likely over.

The EURUSD forecast appears moderate.

EURUSD technical analysis

The EURUSD H4 chart shows that the market continues to develop the first upward impulse. A consolidation range has formed around the 1.0758 level, and after a breakout above it, the price has reached the local target of the growth impulse at 1.0824. A technical return to the 1.0758 level (testing from above) is worth considering today, 8 November 2024. Subsequently, the EURUSD rate is expected to rise to 1.0833, the first target. After reaching this level, the price may decline to 1.0758.

The Elliott Wave structure and corrective matrix, with a pivot point at 1.0814, technically confirm this scenario. This level is considered crucial for a corrective wave in the EURUSD rate. The market has reached the central line of a price envelope, with a consolidation range likely to form around this line. The price could break above this range, aiming for 1.0880, with the correction possibly extending towards the upper boundary of the price envelope. In case of a downward breakout, the price might reach 1.0680. Subsequently, a new corrective wave could begin, targeting 1.0950.

Summary

The EURUSD pair must account for the full range of economic data and political decisions released this week. Technical indicators for today’s EURUSD forecast suggest that the growth momentum could continue towards the 1.0833 level.