The euro is expected to weaken, with the strengthening dollar exerting additional downward pressure on the EURUSD. The European Central Bank (ECB) maintained its interest rates at the October policy meeting, reaffirming its commitment to restoring inflation to the 2% target over the medium term. Policy decisions will continue to be data-dependent and assessed incrementally through successive meetings. Analysts suggest that the ECB is unlikely to cut rates in the near future. The deposit facility rate remains steady at 2%, with the main refinancing rate and marginal lending rate unchanged at 2.15% and 2.40% respectively, aligning with market expectations and reflecting confidence in the resilience of the Eurozone economy and easing inflationary pressures. Lagarde also stated at Thursday's press conference that the current monetary policy interest rate is at a "favorable levels." Although the so-called "favorable level" is not fixed, the ECB will do its utmost to maintain monetary policy within this range. With the trade agreement reached between Europe and the U.S. during the summer, the recent ceasefire in the Middle East, and today's latest developments, some downside risks to economic growth have been offset.

After the Federal Reserve's consecutive second rate cut of 25 basis points, justified by "risk management" considerations, Federal Reserve Chair Powell's remarks signaled no predetermined path toward easing and warned of significant disagreement within the FOMC regarding December policy actions. He emphasized that a rate cut in December remains "far from a fait accompli." Meanwhile, Powell highlighted the uncertainty surrounding upcoming economic data before the December meeting, noting that the lack of economic indicators could justify pausing interest rate adjustments. Furthermore, the Federal Reserve announced that it will pause its balance sheet reduction starting December 1st and will reinvest maturing principal into short-term Treasury securities. Following the announcement, U.S. Treasury yields flattened during the press conference, and futures markets showed a significant reduction in expectations for a December rate cut. The dollar initially appreciated then depreciated, reflecting the interplay between policy normalization and market pricing adjustments. Analysis indicates that the current U.S. Dollar Index and the Federal Reserve's monetary policy trajectory are approaching three critical inflection points.

Following the MACD death cross on the EURUSD 1D chart, with both the MACD line and signal line crossing below the zero-axis, the market signal indicates a bearish trend. The Bollinger Bands are expanding downward, while the SMAs are diverging downward, with price oscillating along the EMA12 support level. The RSI reading at 39 suggests increasing market pessimism. The current market has once again breached the 1.16 support level, likely approaching the EMA200 around 1.139. In the 1W timeframe, Bollinger Bands are narrowing, with prices oscillating near the middle band. Following a MACD death cross, the MACD line and signal line are pulling back toward the zero-axis, indicating ongoing correction yet to be complete. The RSI value is at 52, with peaks gradually declining, reflecting a cautious market sentiment. If the price fails to hold the middle Bollinger Band, a decline towards the EMA50 or even the lower Bollinger Band is highly probable. Therefore, it is recommended to go short at the highs in the short term.

Trading Direction: Sell

Entry Price: 1.156

Target Price: 1.12

Stop Loss: 1.182

Support: 1.145, 1.14, 1.12

Resistance: 1.182, 1.192, 1.2