EUR / USD pair
On Wednesday, investors returned to active speculation in the market. They ignored the worse than forecasts economic data bringing down all discontent at the speech of Fed Chairman Jerome Powell. The attack on the dollar occurred in the first second of his appearance on the podium, that is, explaining to the media about the connection of the fall of the dollar with Powell's supposed hint at monetary easing not true. Powell did say that rates are at a slightly below average level versus an earlier statement about current rates far below average. But in reality, the market only raised expectations for the December rate from 79.2% to 82.7%, expectations for the March increase increased from 48.5% to 49.5%. However, the yields on government bonds have somewhat decreased, in particular, on 5-year securities from 2.892% to 2.855%. However, in recent months, government bond yields are incorrect to correlate with the Fed's monetary policy, as they are increasingly acquiring a manipulative nature due to the US desire to reduce the burden of debt service. Also, it seems that Powell went against the recent statements of George, Bostic, Evans, and Clarida about the acceptable rate of rate hikes.
In the second estimate for the US GDP for the third quarter remained the same at 3.5% against expectations of a revision of up to 3.6%. The trade balance for October amounted to -77.2 billion dollars against the forecast of -76.7 billion and sales of new homes for the same month amounted to 544 thousand compared to the expected value of 583 thousand. Against this background, a sharp increase in wholesale stocks from 0.4% to 0.7% in October already looks like the overstock of warehouses. The data on consumer incomes and expenditures for October will be able to improve the picture today. The income forecast is 0.4% and expenditures are also 0.4%.
Complicating the current situation is just the fact of yesterday's speculation. Such a broad operation throughout the market should have a goal that is unlikely to be a one-day increase. From this point of view, the price trend towards another testing of the price channel line in the 1.1444 area seems to be justified. Even the exit of the price over the line on the MACD line on a daily basis at 1.1490 will not change the general trend for a medium-term decline in the euro.
On the way, the only resistance is holding the price on the balance line of 1.1444 on the four-hour chart. In the current situation, we can only note that the price is in the free-walk zone, and this zone is fairly wide at 1.1267-1.1444.
