EUR/USD is moving towards 1.1040 in anticipation of the Fed!

The EUR/USD is trading around the level of 1.0950 as the trading week approaches its conclusion, and markets anticipate an early drop in volumes, with US markets closing early for the weekend. The US Global Manufacturing PMI drops to 49.4 in October. US Purchasing Managers' Index (PMI) data spread on Friday, with a decline in the Manufacturing component and an uptick in the Services figures. The US Manufacturing PMI backslid to 49.4, missing the market's forecast of 49.8 and slipping back into contraction territory in November after October's flat reading of 50.0. The Services component expanded, printing at 50.8 versus the forecast decline from 50.6 to 50.4, helping to offset the decline in Manufacturing and keeping the Composite PMI figure on-balance at 50.7, matching October's print. Market participants will be turning their attention towards next week's heftier data releases, with US Gross Domestic Product (GDP) and Eurozone Harmonized Index of Consumer Price (HICP) inflation figures, both due in the mid-week. US QoQ GDP is expected to tick upwards from 4.9% to 5.0%, and pan-Eurozone HICP inflation is expected to slow down from 4.2% to 3.9% for the annualized figure. EUR/USD has gained almost 5% from the early October low at 1.0448, and the pair has climbed three-tenths of a percent on the week. Friday's late technical rally helped to push the pair back into the green after reaching a weekly low near 1.0850. Despite this, the market on the daily chart is at the level of 1.0945 after making a spike on a daily swing at the level of 1.095. Now I expect two scenarios, the main view is long in both. The first scenario involves a direct jump to the 1.1040 area where we have a daily supply zone and where the price could rotate and make a pullback. The second scenario involves a pullback towards 1.087 towards the top of the bullish channel before restarting towards 1.1040, so the target is the same in both scenarios. I wish everyone happy trading, greetings from Nicola.

Comment:

During the American session, the EUR/USD exchange rate increased, surpassing the 1.0950 level. The euro marked its highest daily close since mid-August against the US dollar. European Central Bank (ECB) President Christine Lagarde warned that inflation might slightly increase in the coming months. Speaking at the European Parliament, she mentioned that growth is likely to remain weak. Her comments were not surprising, and the ECB is expected to keep interest rates unchanged. In the United States, data showed a decline in new home sales to 679,000 in October, missing expectations of 725,000. Additional real estate data, including house prices, is expected on Tuesday. The US Dollar Index (DXY) closed below 103.30, marking its lowest daily close since August. With the dollar still appearing vulnerable, the EUR/USD maintains a bullish tone.