The USD Index is aiming to reclaim the round-level hurdle of 107.00 amid a risk-off mood. (Pivot Orderbook analysis)

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• The USD Index is aiming to reclaim the round-level hurdle of 107.00 amid a risk-off mood.
• Fed Powell’s speech will provide cues about interest rate guidance for the December meeting.
• Wednesday’s New York session is expected to display fireworks ahead of various economic catalysts.

The pair currently trades last at 106.87.

The previous day high was 106.89 while the previous day low was 106.06. The daily 38.2% Fib levels comes at 106.57, expected to provide support. Similarly, the daily 61.8% fib level is at 106.38, expected to provide support.

The US Dollar Index (DXY) has shifted its business above the critical hurdle of 106.80 in the Asian session. The USD Index is expected to hit the round-level resistance of 107.00 as the risk-aversion theme is in the spotlight. The risk impulse is extremely cautious ahead of the speech from Federal Reserve (Fed) chair Jerome Powell as he is expected to provide cues about a deceleration in the aggressive interest rate hike pace.

S&P500 remained subdued on Tuesday as investors are expected to make informed decision post the Fed Powell’s speech. Contrary, the 10-year US Treasury yields remained extremely firmer on the belief that the slowdown concept in the rate hike pace is still under observation and yet to be confirmed.

Nervousness in the global markets is highly expected as the speech from Fed chair Jerome Powell will determine the further road to terminal rates. Most likely, the Fed chair is expected to deliver a ‘less-hawkish’ stance on interest rate guidance for December monetary policy meeting as the United States Consumer Price Index (CPI) has already shown meaningful signs of exhaustion. The headline CPI has already slipped to 7.7% from the peak of 9.1%, therefore, Fed policymakers discussed a slowdown in the rate hike pace to assess efforts yet made to contain price growth and to reduce financial risks.

Wednesday’s New York session is expected to display fireworks in almost entire majors and related instruments as the United States economy will report US Automatic Data Processing (ADP) Employment, Gross Domestic Product (GDP), core Personal Consumption Expenditure (PCE), and Fed’s Beige Book.

As per the consensus, the annualized GDP and core PCE for the third quarter are expected to remain stable at 2.6% and 4.5% respectively. A slowdown in both catalysts would cement a downside shift in the rate hike extent for December’s interest rate decision.

On the labor market front, the consensus says an addition of 200k jobs in November vs. the prior release of 239k.

Apart from the economic catalysts, Fed’s Beige Book will provide the regional status of consumer spending, employment, and the extent of economic activities.

Technical Levels: Supports and Resistances

EURUSD currently trading at 106.87 at the time of writing. Pair opened at 106.81 and is trading with a change of 0.06 % .

The pair is trading above its 20 Daily moving average @ 106.66, below its 50 Daily moving average @ 109.67 , below its 100 Daily moving average @ 109.24 and above its 200 Daily moving average @ 105.93

The previous day high was 106.89 while the previous day low was 106.06. The daily 38.2% Fib levels comes at 106.57, expected to provide support. Similarly, the daily 61.8% fib level is at 106.38, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 106.28, 105.76, 105.46
• Pivot resistance is noted at 107.11, 107.41, 107.93

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