It is noteworthy that American economic indicators were mixed; while the economy shows signs of stability, business activity indices in the manufacturing and services sectors (PMI) published by S&P for November were mixed, though they indicate growth.
Additional data showed that American homeowners have become more pessimistic about the economic future, according to the University of Michigan's consumer sentiment index (UoM) for November. This indicator reached its lowest level since 2009, reflecting consumer disappointment due to high prices and falling incomes.
Following the release of this data, the reaction in the EUR/USD pair was moderate as market participants carefully analyzed the ambiguous comments from Federal Reserve officials.
Comments from New York Fed President John Williams and Fed Governor Stephen Miran heightened expectations of a possible 25 basis-point rate cut at the December meeting. Conversely, the views of Boston Fed President Susan Collins and Dallas Fed President Lorie Logan were more cautious, advocating maintaining the current monetary policy without change.
John Williams noted that the central bank's policy is still capable of lowering rates "in the near future," which raised expectations for a December rate cut. Similarly, Miran stated that the fresh non-farm payroll data released Thursday justifies a rate cut, emphasizing that if his vote were decisive, he would "vote for a reduction of 25 basis points." Meanwhile, Logan asserted that rates should remain "at current levels for some time" to assess the impact of existing policies on inflation, noting her difficulty supporting a rate cut in December. Additionally, Collins confirmed that "restrictive policy is justified at this time."
Given the current situation, markets have priced in about a 71% probability of a rate cut in December, significantly higher than the 31% anticipated earlier.
From the euro's perspective, comments from European Central Bank officials were contradictory: Joachim Nagel expressed confidence in committing to fighting inflation, while ECB Vice President Luis de Guindos noted that growth risks are balanced and that the key rate is at an acceptable level.
In the Eurozone, the manufacturing sector declined again in November, with the manufacturing PMI dropping to 49.7 from October's 50, missing expectations for an improvement to 50.2. At the same time, the services PMI rose to 53.1, exceeding the forecast of 53, indicating continued positive trends in that area.
From a technical perspective, oscillators on the daily chart are negative. Also, repeated failures on the 4-hour chart to overcome the 200-period SMA, along with further price declines below the 100-period SMA, favor the bears. For a bullish reversal, buyers need to overcome the 20-day simple moving average (SMA), currently at 1.1570, then the round level of 1.1600, and reach the convergence of the 50- and 100-day SMAs on the way to the round level of 1.1700.
