15.11.201810:06 Forex Analysis & Reviews: EUR: The growth potential of the European currency has declined. The Fed may raise rates at any time.

The European currency continues to attempt to strengthen in tandem with the US dollar. Yesterday's data on inflation in the United States did not lead to significant changes in the market, as they coincided with the forecasts of economists.

According to a report by the US Department of Labor, CPI in October of this year rose 0.3% from the previous month. Core inflation, which does not take into account the volatile categories of food and energy, rose 0.2%. The data completely coincided with the forecasts of economists. Compared with the previous year, the CPI index in October rose by 2.5%, while the base CPI increased by 2.1%.

During his speech yesterday, the Fed chairman said that inflation rates correspond to the target level of the Fed and there is a reason to believe that the situation in the economy will continue to evolve according to a positive scenario.

Powell also noted that market participants should be prepared to raise the Fed's rates at any meeting, as he is very pleased with the state of the US economy. A gradual increase in interest rates is necessary in order to balance the risks.

As for the technical picture of the EUR / USD pair, the upward potential remains as long as the trade is conducted above the support level of 1.1300. The breakthrough of resistance in the area of 1.1350 will cause a new upward wave in the trading instrument, with the highs of 1.1380 and 1.1410 being updated, which will lead to the final reversal of the past downtrend that is now under threat.

Data on the volume of retail trade in the United States, which will be published in the afternoon, can support the US dollar. The inability of buyers of risky assets to get out beyond the resistance of 1.1350 in the first half of the day, paired with US data, can play a cruel joke for the European currency, which will return EUR / USD to the 1.1270 and 1.1230 lows.

The Australian dollar strengthened its position against the US dollar today after the release of a report indicating a good state of the Australian labor market, which shows good activity against the expectations of economists.

According to the Ministry of Labor, unemployment in Australia in October of this year remained at its minimum in the region of 5.0%, and the number of full-time jobs increased immediately to 42,300. Economists had expected an increase in unemployment to 5.3%.

It should be noted that a good growth in the labor market only confirms the correct approach of the Governor of the Reserve Bank of Australia. I recall that Philip Lowe is a supporter of low-interest rates, which are now at the level of 1.5% and are unlikely to be changed in the near future. At the same time, a good growth in the employment market may in the future lead to the acceleration of inflation, which will still force the RBA to reconsider its approach to monetary policy.