It is U.S. Thanksgiving Day, so American trading platforms are closed. Considering the short day on November 28 (which coincides with "Black Friday"), it can be stated that traders have gone on mini-vacations that will end on December 1. Ahead of the extended weekend, buyers attempted to enter the 16-figure16-figure area, testing the intermediate resistance level at 1.1610, which corresponds to the upper line of the Bollinger Bands indicator on the four-hour chart. However, this attempt failed—the sellers took the initiative, and the pair drifted amid an almost empty economic calendar.
Wednesday—important macroeconomic reports were supposed to be released in the United States, but their publication was delayed by a few weeks due to the shutdown. These reports included the core PCE index (one of the key inflation indicators) and the preliminary estimate of U.S. GDP growth in the third quarter. However, the inflation report has been postponed to December 5, and the preliminary GDP estimate has been completely canceled—the Bureau of Labor Statistics will release the second estimate on December 23 and the final estimate in January of next year.
Traders in the EUR/USD pair were left empty-handed and decided to adopt a wait-and-see stance. Overall, bullish sentiment prevails for the pair—primarily due to the strengthening "dovish" expectations for further Federal Reserve actions. Market participants are almost certain that at the next meeting—scheduled for December—the central bank will again lower the interest rate by 25 basis points. According to the CME FedWatch tool, the probability of this scenario is 85%.
On the side of the "doves" are the soft comments from the President of the New York Fed, John Williams, and several other representatives of the Fed, including Stephen Miran, Christopher Waller, and Michelle Bowman (members of the Board of Governors), as well as Mary Daly, the President of the San Francisco Fed.
Additionally, some macroeconomic reports published in the U.S. have also supported the "dovish" scenario. For example, the Conference Board's consumer confidence index reached a multi-month low, dropping to 88.7. The Richmond Fed's manufacturing index plummeted to -15 (with an expected decline to -5), and retail sales showed very weak growth (total sales increased by 0.2%, excluding autos, by 0.3%).
On Wednesday, "second-tier" reports were published—Unemployment Claims and Durable Goods Orders. Despite their "green" appearance, these releases also failed to support the U.S. currency.
The initial jobless claims figure came in at 216,000, marking a seven-month low. In the moment, the dollar reacted positively to the release (the EUR/USD pair updated its intraday low), but as we know, the devil is in the details. The report notes that the number of continuing claims continues to rise; this upward trend has persisted for three consecutive weeks. This indicates weak hiring dynamics: laid-off individuals are remaining unemployed for longer.
The Durable Goods Orders report also has its flaws. On one hand, the release came out in the "green zone" against relatively weak forecasts. For example, durable goods orders increased by 0.5% in September, while the forecast was 0.3%. On the other hand, the indicator's growth rate slowed from the previous month's 2.9%. Additionally, the indicator's growth was partially "artificial" due to defense contracts. More important segments for long-term economic momentum (business investments, equipment purchases) showed weak dynamics.
Therefore, the Durable Goods Orders report did not become an ally for the greenback or for sellers of EUR/USD. The market remains almost certain that the Fed will opt for an additional 25-basis-point rate cut next month.
However, for the northern trend to develop, buyers of EUR/USD require additional information to drive further growth. A catalyst is needed to allow the bulls to consolidate within the 16-figure area and ultimately break through the resistance level at 1.1650 (the lower boundary of the Kumo cloud on the daily chart).
Unfortunately, the remainder of the current week is empty. However, the next week is rich in events. We will learn the November values of the ISM indexes, the ADP employment report, and the September value of the core PCE index.
Ahead of these significant releases, EUR/USD traders are unlikely to open large positions—neither in favor of the dollar nor against it. Therefore, until the end of the current week, the pair is likely to trade within a narrow price range of 1.1560–1.1610 (the middle and upper lines of the Bollinger Bands on H4), in the backdrop of Thanksgiving Day and an almost empty economic calendar.
