Market Analysis: Financial Markets Waiting for Important News


Get ready for a surge in volatility in the coming days, because:
→ today at 16:30 GMT+3: news will be published on inflation in the USA;
→ tomorrow at 22:00-22:30 GMT+3: news from the Federal Reserve on the interest rate will be published;
→ on Thursday: news from the central banks of Europe, Great Britain, Switzerland will be published.

Add in geopolitical tensions, the possibility of Biden's impeachment, news on unemployment and retail sales in the US and other factors affecting prices — this week is likely to be very turbulent before financial market participants go on holiday.

The greatest optimism reigns in the stock market. The S&P 500 index updated its maximum for the year. Because investors believe that inflation will continue to cool, and over time the Federal Reserve will cut rates, giving new impetus to corporate growth. This expectation is probably already factored into the current price, so deviations from expectations can trigger unexpected price movements.

Assessing the EUR/USD chart, we can note that:

→ the psychological level of 1.100 worked as resistance, as we expected on November 29;
→ the rate is near the lower border of the ascending channel, however, energetic price rebounds, which are typical when touching the lower border in strong bullish markets, are not observed;
→ level 1.0835 changed its action from support to resistance (as the arrows show).

In general, it is very likely that the reaction to each subsequent news can adjust the reaction to each previous one. Therefore, the likelihood of falling into a trap in the EUR/USD market increases, for example, in a likely scenario of a false rebound from the lower border of the ascending channel followed by its bearish breakdown, which will support the strengthening of the USD, which unfolds in December, as indicated by EMA(100).

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