11.12.201905:07 Forex Analysis & Reviews: Forecast for EUR/USD on December 11, 2019

EUR/USD

Yesterday's indicators on sentiment in business circles of the eurozone greatly exceeded expectations and the single currency closed the day with an increase of 28 points. The Eurozone ZEW Economic Sentiment index for December jumped from -1.0 to 11.2 points while expecting growth to 2.2 points, the German index grew from -2.1 to 10.7 while expecting 1.1 points.

On the daily chart, the price exceeded strong resistance of the Fibonacci level of 123.6% and the embedded line of the price channel. The price exit above the signal level of 1.1116 (December 4 high) opens the way for further growth to the Fibonacci level of 110.0%. Today, the main news of the day will be the US central bank's decision on monetary policy, followed by a press conference by Federal Reserve Chairman Jerome Powell. We do not expect strong movements in the euro until the evening, as it was yesterday.

What will be the Fed's forecasts on the economy and forecasts of the FOMC members on rates? The most obvious answer lies on the surface - economic forecasts will be moderately optimistic, rate forecasts will shift towards holding the current 1.75% almost until the fall-winter of next year. And if it turns out that way, then investors can count on maintaining the rate almost until the spring of 2021, until the new president takes office. A financial crisis may hinder this situation, the chances of the deployment of which are great next year, but so far this factor has not been taken into account.

In general, we expect the euro to return under the newfound support from the Fibonacci lines and the price channel and a further decrease in the price to the Fibonacci level of 138.2% at the price of 1.0985.

On the four-hour chart, the signal line of the Marlin oscillator reached the boundary with the growth territory, from which the indicator can turn down, followed by a price drop.