USD Forced to Decline

The EUR/USD pair opens the new week of November consolidating near 1.0687.
 
The US dollar retreated slightly following comments by US Fed chair Jerome Powell. He mentioned the possibility of the central bank raising interest rates again if inflation exceeds the target level.
 
Currently, market reactions are the exact opposite of previous trends. Although a rise in interest rates should theoretically support the national currency, it is now perceived more as a threat to the economy and the financial system, displeasing many.
 
Investors continue to anticipate positive news in the Fed’s comments regarding an end to interest rate hikes. However, Powell has consistently emphasised, since the Jackson Hole symposium, that decisions will depend on the incoming statistics.

EUR/USD technical analysis
 

 
On the EUR/USD H4 chart, the quotes have reached the correction target of 1.0706. At the moment, a consolidation range is forming around 1.0690. With the exit from the range downwards, the declining wave could continue to 1.0595. The breakout of this level would open the potential for a wave of decline to 1.0470. Technically, this scenario is confirmed by the MACD indicator. Its signal line is above the zero mark, aimed strictly downwards.
 

 
On the EUR/USD H1 chart, the quotes have completed a declining wave to 1.0655. A link of correction to 1.0706 might follow. After its completion, a new wave of decline to 1.0626 might follow, from where the trend could continue to 1.0596. Technically, this scenario is confirmed by the Stochastic oscillator: its signal line is under 80 and continues its decline to the 20 level.

By RoboForex Analytical Department
 
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.