EURUSD:
EUR/USD remains under pressure amid steady demand for the US dollar ahead of the October 29–30 FOMC meeting and a tense news backdrop in the Eurozone. While markets are already pricing easier conditions in the US, the key driver for the exchange rate is the Fed’s wording on inflation prospects and the rate path into year-end. Any signals of caution from the regulator support US yields and dollar demand, capping euro gains.
Within the Eurozone, budget risks in several countries and slowing business activity act as an additional drag, reducing capital inflows into regional assets. Investors closely watch signals around France’s public finances and the trajectory of confidence and PMI indicators: deterioration in fiscal and cyclical data curbs risk appetite for European assets and weighs on the currency.
In the short term, the balance of factors is still tilted toward dollar support: US labor and consumer-price data shape rate expectations, and a high premium in US real yields sustains flows into dollar instruments. Taken together, this argues for maintaining a moderately defensive stance on the pair with a target below 1.1600 and limited risk.
Trading recommendation: SELL 1.1640, SL 1.1670, TP 1.1590
Origin: FreshForex
