Last week, FOMC raised the interest rate by 0.75% as expected and the stock market was rally after the interest rate announcement, but then the market turn bearish again after Powell’s speech. Powell has turned down the market’s hope of slowing interest rate hikes and the USD turned strong before Friday.
On Friday, The Bank of England raised interest rates by 75 basis points, its largest single hike since 1989 but the market had anticipated the less hawkish tone from the central bank after the change in the U.K. government. This has caused EURUSD to rally by more than 2% in a single day and commodities prices also have a big rally that was not seen in the market for a while. Eg. Copper price has raised more than 8% in a single day.
This week, the 8th of Nov is the US Midterm election. It is anticipated the market will be very volatile this week.
EURUSD Bullish Factors
- Any less hawkish tone from other Central Banks in other countries
- More dovish statements from FOMC to slowdown rate hike might make EURUSD bullish too.
EURUSD Bearish Factors
- More negative news on Nord Stream gas flow to Europe and any potential Energy shortage in Europe.
- The potential return of the European sovereign debt crisis is another factor to watch. The interest rate rise in the European zone will cause weaker European countries that have higher debt will need to repay their debt at a higher rate.
- More Hawkish comments from US Federal Reserve members also will make EURUSD bearish again.
The election result is always unpredictable and the result will definitely impact EURUSD.
Recommendation
With this outlook, and to be on the safe side, we strongly recommend all Ophiuchus and Limitless EA users to schedule to stop trading for this period starting from 7 Nov till 9 Nov . You can use the stop trading period feature in the EA to do that. You can also decide to extend the stop trading period (eg, till 13 Nov and only start trade on the week after next) if you would like.
Disclaimer – Please note that Limitless Trading is not liable for our recommendation and is not responsible for any loss or profit caused by this recommendation. You should assess your personal circumstances and perform your own research to make decisions for your trading.
