11 November 2024, EUR/USD
EURUSD:
The Euro-dollar pair continues to experience downward pressure for the second consecutive session, hovering around 1.0720 during Asian trading hours on Monday. The pair is pressured by the strengthening US dollar (USD) and political uncertainty in Germany.
Investors are expecting a less soft stance from the Federal Reserve as Donald Trump is likely to continue to fulfill his campaign promises to impose significant tariffs, including a 10 percent hike on imports and corporate tax cuts.
Analysts believe that if Trump's fiscal policies are implemented, they could lead to an increase in investment, spending and labor demand, raising inflation risks. This could prompt the Fed to adopt a tighter monetary policy, potentially strengthening the US dollar and putting additional pressure on EUR/USD.
However, Fed Chairman Jerome Powell said on Thursday that he does not expect Trump's potential return to the White House to affect the Fed's policy decisions in the near term. “We are not guessing, speculating, or assuming what future government decisions will be,” Powell said after the bank decided to cut interest rates by 25 basis points to a range of 4.50%-4.75%, as expected.
On Friday, the University of Michigan's preliminary index of consumer sentiment rose to 73.0 in November, up from 70.5 in October and above market expectations of 71.0. This favorable data generally strengthened the US dollar.
Trading recommendation: Trade predominantly with Sell orders from the current price level.
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