Thin market is always unpredictable
Hi, dear colleagues!
It is the last trading day of the week. First let us review this week's Fed news, the COVID-19 situation in Europe and the economic calendar.
On November 22, US president Joe Biden appointed Jerome Powell as chairman of the Federal Reserve for the second term, as expected earlier. During his first term, Powell pursued a prudent, independent monetary policy. When Donald Trump demanded the Fed to ease the monetary policy, Powell stood his ground. At this point, he has put tackling high inflation on hold, dashing market expectations of a more hawkish Fed policy. Right now, the main objectives of the Federal Reserve are maintaining a regular supply-and-demand balance, resolving supply chain issues and stabilizing consumer prices. Investors eye the December meeting of the Fed, to be held on 14-15 December.
The COVID-19 situation remains alarming, particularly in Europe. As Germany faces an upsurge in confirmed cases, German authorities regard the current vaccination rate of below 70% as inadequate. Vaccination is now mandatory for German military personnel. Overall, a quarter of the EU's adult population is unvaccinated. In the meantime, scientists describe the new emerging COVID-19 strain in Southern Africa as the most dangerous of all - its 33 mutations could make it more transmissible and resistant to vaccines.
Due to Thanksgiving Day, trading is currently closed in the US. Today is a quiet day on the economic calendar, with the only notable events being reports on EU M3 money supply and private loans.
Daily
The daily chart shows few significant changes for EUR/USD. The price is close to the key level of 1.1200. The pair bounced upward off 1.1187 and is currently trading near the 1.1236 mark. A continuing retracement would push the price against the red Tenkan-Sen line of the Ichimoku indicator, which is currently at 1.1286. The lower shadow of this week's candle could increase if EUR/USD continues to rise, which could indicate a reversal. As traders fix profits in the final trading session of the week amid the current thin market, this scenario couldn't be out of the question. Traders are recommended to stay out of the market and eye the pair's performance at the end of the trading session.
Good luck!