WILL FED CUT RATE BY 25BPS TODAY?

• NOVEMBER FED FUND RATE DECISION
• A GLANCE AT LAST JOB REPORT
• OVERVIEW OF EURUSD

Markets are eagerly awaiting the Federal Reserve’s decision on the federal funds rate, to be released today Thursday 7th November 2024 at 11:00 PM GMT+4. This announcement is important and hence widely anticipated as traders and investors look for guidance on potential rate cut or a pause, influenced by recent economic data and bond market volatility. The Fed’s decision will be closely watched for indications of future policy direction, especially with the ongoing economic uncertainties and evolving inflation dynamics.
Recall, In the September policy meeting, the Fed implemented a significant rate cut of 50bps after about four years of high rates. However, Chair Jerome Powell emphasized that this large cut does not set a “preset course,” as future decisions will depend on economic data. Meanwhile, inflation seats 2.4% slightly above the 2% Fed target and unemployment rate at 4.1%.
At the time of writing, the market has priced in a 97.4% probability of a 25-basis point cut and a 2.6% chance of a 50-basis point cut today, according to the FedWatch tool.

A GLANCE OF LAST JOB REPORT 
The October jobs report, released on Friday, November 1st, 2024, was significant for two reasons: it was the last jobs report before the U.S. election and the last before the November FOMC policy meeting. Unfortunately, the data was disappointing, with only 12,000 jobs added in October. This happened to be the weakest performance under Joe Biden’s administration. Contributing factors to such data included severe hurricanes and labor strikes.
            This report dealt a blow to the Democrats, amplifying concerns about Kamala Harris’s ability to manage the economy. Analysts believe this weak report may have played a key role in Donald Trump's victory, as many views him as more experienced in economic policies than Kamala.

AN OVERVIEW OF EURUSD
The fiber remains in a broad downward trend, and like other pairs, it reacted to the volatility from the U.S election. The pair recently broke through a strong support zone at 1.0770 in the wake of the election. Currently, it has retraced back to this level. Which having been broken on November 6th, now acts as resistance. Aligned with the Fibonacci retracement, this point corresponds to the 38.2% level.
While the pair consolidates in this zone, an actual or positive reading on the fund rate could strengthen the USD, potentially driving the pair down to retest the recent low of 1.0685, with a further target of 1.0600. Conversely, a weaker USD could allow the fiber to continue its retracement, targeting the 50%, 61.8%, and 78.6% Fibonacci levels at 1.0806, 1.0837, and 1.0882, respectively. Breakouts beyond these levels are also possible as per technical analyst.

Fig.1 EURUSD 4H TRADINGVIEW CHART