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Is 1.1477 bottom or paper? A job data may make the euro bottom again
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: Is 1.1477 a bottom or a paper? An employment data may make the euro hit the bottom again." Hope this helps you! The original content is as follows:
On Tuesday (November 4), the EURUSD traded below 1.1500 during the North American session. The early rise was quickly pushed back at the 1.1530 line, and then effectively fell below the psychological mark of 1.1500. The intraday low once touched 1.1477. In the past five trading days, it has fallen back by about 1.5%, showing that the US dollar still dominates both macro and sentiment.
Fundamental analysis: The U.S. dollar is still elastic, but the euro has limited momentum
The U.S. dollar continued to be strong this week. Even though the U.S. ISM manufacturing PMI fell to 48.7 in October (previous value 49.1, expected 49.5), the manufacturing industry has been in contraction range for the eighth consecutive month. The new orders index rebounded to 49.4 (previous value 48.9), and the employment sub-item rose to 46.0 (previous value 45.3), but they are still below the 50 boom-bust line. The data gave a www.xmserving.complex signal of "weak growth and soft but not worsening employment": on the one hand, there is no marginal improvement in the drag on the manufacturing industry to change the policy path; on the other hand, the risk of recession has not increased significantly, and the dollar's hedging and interest rate support have not been fundamentally weakened.
Federal Reserve officials are not consistent. San Francisco Fed President Daly emphasized that inflationary pressures are still there and that "moderate restrictions" need to be maintained; Chicago Fed President Goolsbee also focused on inflation rather than a slowdown in the labor market. In contrast, Federal Reserve Governor Stephen Miran believes that current interest rates are too tight. The pricing of interest rate swaps and federal funds futures also saw slight adjustments: market bets on another interest rate cut in December dropped from more than 90% a week ago to about 67%, giving U.S. bond yields and the U.S. dollar index support near highs. In other words, “cutting interest rates further willThe expectation of "faster and deeper" has cooled down, directly weakening the imagination of interest rates for the euro to rebound.
In Europe, the final value of the euro zone HCOB manufacturing PMI was confirmed to have risen to 50.0 (previous value 49.8), technically back to the line of prosperity, but more like "stagnation rather than expansion." Structural drag is still there, and the improvement in orders and output lacks sustainability. As for the European Central Bank, in the previous profit After the rate remains unchanged, the probability of releasing new policy clues in the short term is low. In contrast, the market consensus of "continuing to observe rather than quickly relax" can substantially support the US dollar. Therefore, at the fundamental level, the exchange rate is still under dual pressure from interest rate differentials and risk appetite.
At the same time, the US dollar index has retreated modestly from its highs, but the downside risk is limited. Risk aversion has not subsided, and the retracement of bets on further interest rate cuts in December has offset the negative impact of weak manufacturing data on the dollar, www.xmserving.combined with the statistical window caused by the U.S. government shutdown, JOLTS job vacancies and the absence of factory orders, causing the market to focus more on ADP employment on Wednesday. If employment remains resilient, it will further consolidate the path of "slow interest rate cuts, long stay". Continue to be negative for the euro.
Technical:
Looking at the 30-minute K-line, the exchange rate rebounded around 1.1530 and then fell below 1.1500 to form a clear downward breakthrough. The price fell back to 1.1492 after hitting the lowest intraday level of 1.1500, which is still below the "resistance to support" level of 1.1500. " below, indicating that short sellers still have control over the short-term rhythm.
MACD shows that DIFF is about -0.0007, DEA is about -0.0004, and the histogram is about -0.0006. The whole is still below the zero axis, and the kinetic energy is negative, but the length of the column has converged www.xmserving.compared with the previous period, indicating that the downward kinetic energy margin has weakened and there is a technical pullback demand. RSI (14) is about 38 .86, which is below 50 but has not reached extreme oversold. Together with the price's rapid recovery of 1.1477, it constitutes a "short-term repair in a weak situation". www.xmserving.comprehensive judgment: 1.1500 constitutes the primary resistance. The top will focus on the superimposed supply area of 1.1530/1.1533 and 1.1540. The immediate support below is 1.1477. If it falls below again, the bears will try. Expand to a lower liquidity-intensive area; if it stands back and stabilizes above 1.1500, it is possible to open the backtest window for the 1.1530-1.1540 range.
Market sentiment observation:
The sentiment is "cautious and risk-averse". The equity market volatility is high, the risk premium of risky assets has not substantially converged, and the US dollar is acting against the dual factors of risk aversion and interest rate differentials. The market remains confident about the euro's rebound options. Disagreement over the Fed's caliber has increased volatility in the short term, but the consensus is still that the policy will not quickly switch from "restrictive" to "accommodative" before core inflation has declined convincingly. This makes the trading framework of "cautious on highs and heavy on rebounds" still dominate the day-to-day extension of the euro against the dollar.
ADP employment has become the first catalyst that can change the rhythm this week; if employment resilience exceeds expectations, bearish market sentiment may gain momentum again; if it weakens significantly, profit-taking and position covering in the US dollar may trigger a technical counterattack in the euro. The asymmetry of sentiment lies in the fact that the continuation of short positions requires data confirmation, but the efforts of bulls also need to return to the key level (1.1500) to gather consensus.
The above content is all about "[XM Foreign Exchange Platform]: Is 1.1477 a bottom or a paper? An employment data may make the euro hit the bottom again". It is carefully www.xmserving.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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