EUR/USD
The euro was 12 pips short of reaching a strong resistance level at 1.0687. As a result, the single currency fell by 40 pips, and the price returned below the balance line on the daily chart. The Marlin oscillator also returned to the position it had on Tuesday morning. The strong move towards 1.0687 from yesterday has, from a technical standpoint, reduced the chances of another upward surge after the Federal Reserve's FOMC meeting. As before, we expect a generally soft announcement and comments from Fed Chairman Jerome Powell, but the market's reaction is becoming more uncertain.
The main sign of a looming surprise for the FOMC meeting is that yesterday's strong move towards 1.0687 occurred despite weak data from Germany (retail sales for September -0.8%). Only dismal data from the eurozone's GDP (-0.1% for the 3rd quarter, reducing annual GDP from 0.5% to 0.1%) turned the market around.
Today, the U.S. will release ADP employment data, with a forecast of 150,000 jobs compared to 89,000 in September. The forecast for the ISM Manufacturing PMI for October is expected to remain unchanged at 49.0, but the reading may turn out slightly better than expected to boost the dollar before the Fed's announcement. Yesterday's trading volume was above average but not so significant that one could claim it was a false move. Therefore, the situation is becoming extremely confusing, and the range of free movement is wide. If the price breaks above 1.0687, the target will be 1.0730, while a breakdown of the support level at 1.0510 opens the way to 1.0449. There's a 60% chance of a bearish scenario.
On the 4-hour chart, the price has settled below the balance and MACD indicator lines, and the Marlin oscillator is progressing in the downtrend territory. These circumstances also provide a slight bearish advantage.