09.12.202511:59 Forex Analysis & Reviews: USD gains slightly yesterday

The American dollar experienced a modest gain yesterday against a range of risky assets. This movement was attributed to data from the Federal Reserve Bank of New York, which indicated that consumer inflation expectations in the US remained stable in November, while perceptions regarding job prospects improved.

In the monthly Consumer Expectations Survey conducted by the Federal Reserve Bank of New York, the expected inflation rate for the coming year remained virtually unchanged at 3.2%. Meanwhile, the expected inflation rate for three and five years ahead held steady at 3%. The perceived probability of job loss decreased to 13.8%, representing the lowest figure of the year.

Consumer optimism appears to be bolstered by a still robust labor market and relatively stable prices for goods and services. The decline in concerns about job loss recorded in the survey suggests a sustained confidence in economic stability in the near future. Together, these factors contribute to the maintenance of consumer spending, which is a primary driver of economic growth.

However, despite this optimism, there remains some caution regarding long-term economic prospects. The expected inflation rate for three and five years ahead, while stable, still indicates ongoing concerns about price stability in the longer term. The Federal Reserve will likely need to continue monitoring these indicators closely to effectively adjust its monetary policy.

It is important to note that consumer expectations are a dynamic indicator, influenced by a multitude of factors, including the geopolitical climate, changes in government policy, and unexpected economic shocks. Therefore, the survey results should be viewed within the context of a broader economic landscape rather than as a definitive forecast of the future.

Tomorrow, following a two-day meeting, the Federal Reserve is expected to lower the benchmark interest rate for the third consecutive time to safeguard against deteriorating conditions in the labor market. Nevertheless, some officials have expressed concerns that the new tariff policy from Trump could result in long-term price increases.

The Federal Reserve Bank of New York survey revealed that in November, consumers were generally more optimistic about the labor market compared to the previous month, reducing the likelihood of higher unemployment levels in a year and reporting better chances of finding work if they were to lose their current jobs. However, considering that employment prospects are still worse than they were last year and inflation remains high, an increasing number of households are reporting a decline in their personal financial situation. The proportion of respondents indicating that their current financial condition has worsened compared to last year rose to 39%, the highest level in two years.

Regarding the current technical outlook for EUR/USD, buyers now need to focus on reclaiming the 1.1650 level. Achieving this will allow them to target a test of 1.1680. From there, they could aim for 1.1705, but doing so without support from major players may prove challenging. The furthest target will be the peak at 1.1725. If the instrument declines, I expect serious moves from major buyers around the 1.1625 level. If there is no activity there, it may be prudent to wait for a new low at 1.1590 or to open long positions from 1.1570.

As for the current technical picture of GBP/USD, pound buyers need to reclaim the nearest resistance at 1.3350. Only then can they target 1.3380, above which breaking through will be quite difficult. The furthest target will be the area around 1.3415. If the pair declines, bears will try to take control at 1.3310. If they succeed, breaking through this range will deal a significant blow to bullish positions and push GBP/USD down to a low of 1.3270, with the potential to reach 1.3240.