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Forex Analysis & Reviews: Overview of the EUR/USD Pair for November 3. Global Technical Analysis Resolves Everything!
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The EUR/USD currency pair continued to trade lower throughout Friday. Did this surprise anyone? Among the interesting events on the last trading day of the previous week, only the Eurozone's first October inflation estimate, which unexpectedly came in at 2.1%, is noteworthy. The previous month recorded a value of 2.2%, and most traders expected a year-on-year decline to 2.1%. Thus, this was precisely one of those cases where expectations completely aligned with reality. Consequently, there was nothing for traders to react to. However, after this report, the European currency once again plummeted, even though this report changes absolutely nothing. It should be understood that when inflation was at 7% or 5%, any decrease/increase, or conformity/non-conformity with forecasts mattered to the market and influenced the European Central Bank's monetary policy. Now, the ECB itself, along with Christine Lagarde, openly states that inflation has stabilized, that the parameters of monetary policy are satisfactory, and that there is no need to adjust the key rate. Therefore, whether inflation rises or falls makes no difference; it remains close to the target level. The market has once again used a formal reason to sell the pair. Recall that throughout October, we repeatedly pointed out that there are no grounds for the dollar to rise, and this remains the case over the past month. Of course, any movement can always be explained retrospectively, which is what most experts constantly do. For instance, after the Federal Reserve meeting, where the key rate was lowered for the second consecutive time, the dollar also rose, and experts claimed that the Fed was not "dovish enough," which sounds absurd. The experts probably expected Powell to openly promise a rate cut in December, which the Fed chair has never done. His rhetoric from meeting to meeting boils down to the same thesis that decisions on rates can only be made based on macroeconomic data. Currently, key macroeconomic indicators on the labor market and unemployment are not being published due to the ongoing shutdown, which has lasted a month (and the market is also ignoring this factor). Thus, Powell could not, in principle, promise a rate cut in December, nor could he even imply it. We have smoothly approached the essence of the matter. Since the current downward movement may only be another wave of correction on the daily timeframe, it is the right time to pay attention to the weekly timeframe. There, we see a clearly defined descending trend line, from which the price recently bounced for the fourth time (the corresponding illustration is provided in the trading recommendations articles linked below). Since the price has bounced off the global descending trend line and the daily timeframe continues to show a flat trend, the current rise in the American currency is purely technical. Neither the fundamental nor macroeconomic background plays any role here.
Analysis are provided by InstaForex.
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Forex Analysis & Reviews: EUR/USD Overview. November 4. A New Record for the "Shutdown" Is Near
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The EUR/USD currency pair continued its downward movement on Monday, with no sign of a respite. However, we've been stating for over a month that the current decline in the EUR/USD pair is entirely illogical and can only be driven by technical factors on higher timeframes. On the weekly timeframe, the price has bounced off a long-term descending trend line, while on the daily timeframe it continues to show flat movement, with the price declining. The market continues to ignore a vast number of factors that are pressuring the US dollar. One of these factors is the "shutdown," which has recently been somewhat overlooked. To be precise, it has not been "forgotten," but rather "normalized." "Shutdowns" have become a common occurrence under Trump, as the President of the United States negotiates only through threats and ultimatums. With many countries lacking the economic and military power of the US, Washington under Trump imposes its terms of cooperation. Many agree to this. However, Trump has no leverage against the Democrats or the Federal Reserve. Therefore, on the home front, Trump is experiencing defeat after defeat. Turning back to the "shutdown," today marks the 35th day of the suspension of government operations and all state structures. The US Senate has already convened 13 times to vote on next year's budget, and each time has been unsuccessful. Some might think that the Democrats and Republicans made 13 attempts to reach an agreement. However, they merely gathered 13 times to re-vote. No one is willing to make concessions. The Democrats have no reason to yield to their principled adversary, who has antagonized them throughout 2025. Republicans are standing firm and refuse to back down from Trump's position. Experts estimate that each week the American economy is "stalled" costs it 0.01% to 0.03% of GDP on a quarterly basis. So, having passed four weeks, we will wait for the fifth and sixth weeks, and a new record for the length of a "shutdown" (the previous record was exactly 35 days) will be set, followed by Trump's fiery speeches blaming the Democrats for the slowing growth of the US GDP. It still appears that Trump is running not a country, but his own bank. There's no guarantee that such a management strategy would be successful, but if it were Trump's bank, he would have every right to promote any of his decisions, regardless of their consequences. Here, we are discussing an entire country with hundreds of millions of people who are caught in this situation. Thus, the "shutdown" is highly detrimental to the US economy. And since it is detrimental to the economy, it is also detrimental to the dollar. Therefore, we still believe that the fundamental and macroeconomic background supposedly explaining the strengthening of the dollar is merely an attempt to present wishful thinking as reality.
Analysis are provided by InstaForex.
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Forex Analysis & Reviews: Trading Recommendations and Trade Analysis for EUR/USD on November 5. Euro Shows No Signs of Stopping
Analysis of EUR/USD 5M.
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The EUR/USD currency pair continued to trade lower on Tuesday. Volatility was somewhat higher this time, at an average level, but there was no logic behind the movements. The euro has been falling for more than a month, almost without reason. Of course, there have been occasional less favorable macroeconomic data from the Eurozone, and sometimes there is good news from the U.S., but overall, it's the opposite trend. Nevertheless, the dollar has been rising on almost all fronts for over a month. On Tuesday, no significant reports were published throughout the day. The only noteworthy event was a speech by Christine Lagarde, in which monetary policy and economic issues were not addressed at all. Thus, it could not have been the European Central Bank president's speech that triggered a new decline in the European currency. However, the British pound also fell throughout the day, with no apparent reason. Therefore, it can be said that the dollar continued its rise, for which there were even fewer grounds. On the 5-minute timeframe, despite the pair's movement not being so great, a rather good trading signal was generated yesterday. During the European trading session, the price bounced from the 1.1534 level, then moved in the desired direction by about 35-40 pips. Thus, opening a short position based on this signal could have yielded a decent profit (given current realities).
COT Report
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The latest COT report is dated September 23. Since then, no further COT reports have been published due to the U.S. "shutdown". The illustration above clearly shows that the net position of non-commercial traders had long been "bullish," and bears barely transitioned into a zone of their own superiority by the end of 2024, but quickly lost it. Since Trump began his second term as U.S. president, the dollar has only been falling. We cannot say with 100% certainty that the decline of the American currency will continue, but current developments around the world suggest this is likely. We still do not see any fundamental factors that would strengthen the European currency, but there are enough factors for the American dollar to decline. The global downward trend is still maintained, but what relevance does it have to where the price has moved over the last 17 years? Once Trump concludes his trade wars, the dollar may begin to rise, but recent events indicate that the conflict will continue in some form for a very long time. The positioning of the red and blue lines of the indicator continues to indicate the preservation of a "bullish" trend. Over the last reported week, the number of longs in the "Non-commercial" group decreased by 800, while the number of shorts rose by 2,600. Consequently, the net position decreased by 3,400 contracts over the week. However, this data is already outdated and holds no significance.
Analysis are provided by InstaForex.
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Forex Analysis & Reviews: GBP/USD Overview. November 6. What Happens If Rachel Reeves Speaks Every Day?
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The GBP/USD currency pair struggled to avoid a new collapse on Wednesday. Yesterday, we pointed out that there were no grounds for a new fall of the British currency. We maintain that view today. Many experts believe the decline in the British currency, which has been falling for a month and a half, is due to the new speech by UK Chancellor Rachel Reeves. Is this true? Let's not hide the fact that Reeves is like a red rag to a bull for currency traders. As soon as traders see the word "Reeves," they immediately start to divest from the British currency to avoid potential losses. However, it is essential to remember that we seek not emotions but concrete and logical arguments. For instance, Reeves first caused the pound's decline several months ago when she couldn't control her emotions during a speech in Parliament and broke down in tears. Yes, we are talking about the Treasury head. The situation is that Reeves is currently criticized only by the lazy while she is tasked with crafting an appropriate budget for the next fiscal year. A few weeks ago, Reeves again caused the pound to drop when she stated that the UK government would have to adopt a series of unpopular measures to close the budget deficit. Reeves hinted at tax increases, and here is the kicker! Rumors of tax hikes in the UK have been circulating for several months. Overall, everyone understands that if there is a budget deficit, additional revenue is necessary. This means either tariffs or taxes. Since Donald Trump cannot govern both the UK and the U.S. simultaneously, the British Parliament decided to pursue tax increases. And on Tuesday, Reeves publicly reiterated the need to raise certain taxes. What's new and unexpected for the market about this, especially when the idea of tax increases has been in the air for several months? Imagine a situation where next week, Reeves speaks publicly again and announces the need for tax increases. Will the British pound drop another 100 pips? What if Reeves speaks every week? What if she speaks every day? We want to convey that if the head of the Treasury indeed provoked the pound's decline on Tuesday, the market has already been processing this news for the second or third time. However, it continues to ignore a whole host of negative factors for the U.S. dollar. One pertinent example is that on Monday, a clearly weak and significant ISM manufacturing activity index in the U.S. was published, but for some reason, the market ignored it. Meanwhile, it has responded with three times the intensity to the same message from Reeves.
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Forex Analysis & Reviews: Overview of the EUR/USD Pair. November 7. The Euro Continues to Crawl on Its Knees
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The EUR/USD currency pair traded with minimal volatility on Thursday, showing little desire to move in any direction. Overall, the currency market saw little change by the end of the day. While the UK had at least the Bank of England meeting, whose results could surprise traders, the EU published two routine reports that absolutely no one found interesting. This is not surprising, as this week the market comfortably ignored much more significant ISM and ADP reports. Thus, it is no wonder that the market paid no attention to industrial production in Germany (which, as usual, turned out worse than expected) and retail sales (which also fell short of expectations). For over a month, we have been stating that the current decline of the euro and the strengthening of the dollar are completely illogical. It all began back in early October when Donald Trump started imposing new tariffs. Recall that the "tariffs" affected all trucks imported into the United States, pharmaceuticals, and even furniture. Shortly after, Donald Trump announced a 50% tariff increase for India, and a little later, a 100% tariff increase for China. Throughout this time, the dollar rose calmly. Yes, towards the end of the month, trade tensions between the United States and China eased somewhat, and the parties even managed to sign some sort of truce. For one year. But how can it be said that the dollar rose on this news when it rose just as much on the escalation of tensions between the two "giants" of the political world? One should also not forget about the "shutdown." When it just began, experts were trumpeting at every corner that now the dollar would be in trouble. But, as we can see, throughout October, the American currency appreciated, and the "shutdown" became yet another factor that the market simply ignored. It is also worth recalling the Federal Reserve's "dovish" policy. In September and October, the Fed lowered the key rate twice, but even in this case, the dollar continued to rise. This is despite the European Central Bank and the Bank of England keeping their key rates unchanged. Of course, many "experts" immediately began to talk about the "not sufficiently dovish stance of the Fed" to attempt to explain the rise of the American currency. We remind you that there are plenty of market movements that are extremely difficult, if not impossible, to explain. Therefore, when such movements are observed, it is essential to face the reality rather than concoct justifications.
Analysis are provided by InstaForex.
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Forex Analysis & Reviews: "Shutdown" May Continue Until November 27
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On Saturday, the 40th day of the "shutdown" in the United States began. Remember that it all started with discussions about ending the "shutdown" within two weeks. Now, the "shutdown" has set a new record for duration, surpassing the previous one (also under Donald Trump) that lasted 35 days in 2019. One could overlook this new record if the Democrats and Republicans were at least approaching an agreement. However, this time they are not even striving to negotiate. As I have written previously, the current "shutdown" is unlike any before it. Donald Trump began his second presidential term by violating a significant number of laws (thus regularly facing legal challenges) and immediately made it clear to the U.S. Congress that he does not feel the need for it. It should be noted that Republicans control both chambers of Congress, so the outcome of votes on Trump's initiatives is largely predetermined. However, in some cases, Trump did not even hold votes and simply made decisions, signing the corresponding order. Thus, the budget bill for government spending (in simple terms, the budget for the next fiscal year) became the first real opportunity for Democrats to push their ideas forward. The Democratic Party opposes cuts to the Medicaid program and demands an extension of tax incentives for health insurance. Recall that several months ago, Trump passed the "One Big Beautiful Bill," which, among other things, involves significant cuts to social and medical programs for low-income and vulnerable populations.
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As a result, the Democrats are simply blocking the funding bill, knowing that without their approval, Trump cannot pass it. To approve the bill, more than just 50 votes in the Senate are required (which Republicans could easily secure); 60 votes are needed. This is where the snag lies. Democrats understand that this is their only chance to remind the American public of their existence. Therefore, it is highly likely they are blocking it—and will continue to do so on principle. However, Trump and his party are unwilling to concede on this issue. On the contrary, Trump insists that funding must be unblocked and the "shutdown" ended before any negotiations can begin. But it is clear to the Democrats, as day follows night, that once the funding bill is passed, they will lose leverage over the U.S. president. Thus, the "shutdown" continues. Wave Picture for EUR/USD: Based on the analysis of EUR/USD, I conclude that the instrument continues to build a bullish segment of the trend. In recent months, the market has paused, but Donald Trump's policies and the Federal Reserve remain significant factors in the future decline of the American currency. The targets for the current segment of the trend may reach the 25 figure. At this time, the corrective wave 4 is being constructed, taking on a highly complex, elongated shape. Its latest internal structure a-b-c-d-e, is near completion or has already been completed. Therefore, I am once again considering purchases, as all recent downward structures appear corrective.
Analysis are provided by InstaForex.
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