EUR/USD Weekly Forecast: U.S Election and Federal Reserve Forex Show Coming – 03 November 2024

The EUR/USD finished the week near the 1.08316 ratio, essentially returning to value the currency pair traversed on Wednesday, this as nervous financial institutions wait for the risk events that are coming.

-- Simply put if you are a day trader and thinking about speculating in the EUR/USD early this week and over the next five days you need to be extremely careful.
-- A volatile Forex show is going to be delivered from tomorrow into next Friday, this as financial institutions position before and after the U.S election this coming Tuesday, and the Federal Reserve’s interest rate decision and rhetoric on Thursday.
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The EUR/USD did climb above the 1.09060 level momentarily on Friday in the wake of the very disappointing Non-Farm Employment Change statistics. If Friday had been a typical day of Forex trading, the EUR/USD could have been expected to climb and finish the week of trading with a solid demonstration of bullish momentum, this based on the notion the U.S Fed would cut their interest rate on the 7th of November. But because of the U.S election looming and the uncertainty within the broad financial marketplace, large players are expressing a huge amount of caution.

Return to Lower Values as Safe Have Trading Rule the Castle

Financial institutions are nervous, and day traders should be too, because the lack of clarity regarding the potential winner of the U.S Presidency is not a small matter. While some technical traders may point to historical charts and say the election of the President doesn’t matter according to long-term historical charts, this is not a fact when short and near-term considerations must be made. Safe haven trading was seen almost the entire month of October.

Perhaps the EUR/USD will open with relative calm tomorrow and may exhibit tranquil trading as caution is practiced, this could last into Tuesday. However, at some point the door will be opened to a radical amount of volatility which will show not only choppiness in the EUR/USD, but whipsaw movements in which price velocity surges as volumes increase and financial institutions react to who they believe is going to win the White House, and ultimately takes power. The EUR/USD is highly unlikely to be near the 1.08300 vicinity on Friday of this coming week.

Speculative Wagers and Getting to the Fed Decision

The outcome for the White House will be a huge catalyst in the EUR/USD and Forex early Wednesday of this week. After so much safe haven trading being seen the past five weeks, financial institutions may start to initiate positions which cause rather large movements and possibly reversals in the currency pair. The Fed’s interest rate decision is likely to include a 0.25 basis point decrease this week.

If the Fed also sounds dovish with their policy and indicates they believe inflation remains under control, this could help fuel EUR/USD bullishness.
However, for buying to be attained it means the race for the White House has also produced a clear winner.
Traders who want to trade the EUR/USD before the U.S election result is final, need to understand price movement will be fast and dangerous.
There are many variables about to be seen and betting on outcomes before the U.S election and Fed rhetoric are known this week will be very speculative.

EUR/USD Weekly Outlook:Speculative price range for EUR/USD is 1.07960 to 1.10300

Day traders who feel as if the EUR/USD currency pair remains in oversold territory will have to get help from the U.S Federal Reserve this coming Thursday with an interest rate cut and talk of more possible cuts in the coming months. Also the U.S election will have to be sorted out cleanly and financial institutions will need to be comfortable with the winning side. Traders should expect wide price ranges to be seen and spreads via bids and asks to increase on Tuesday and Wednesday. It will not be easy to trade for smaller speculators.

The EUR/USD has been in a bearish cycle for the past handful of weeks, the attempt at a rally going into the weekend faded as caution seeped into Forex again. Traders this coming week need to understand financial institutions will create plenty of volume in the Forex market as large players position for their new mid-term outlooks which may have more clarity as of Thursday night and going into this Friday. Until then EUR/USD traders may want to watch the Forex show because it is going to be fast and entertaining.

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