EURUSD: RISK REVERSAL IN SHORT TERM

TRADING STRATEGY:
- If you have a bearish view (look our previous analysis here: www.tradingview.com/...EURUSD-ONLY-REBOUND/), put your stop loss in BE and let run your profit.
- if you are a bullish view (speculative), look at 1.066 for potential reversal area with stop below 1.062 and target @ 1.076/1.079


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TODAY'S EVENTS
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- ECB Publishes Account of Monetary Policy Meeting (12.30 London Time)
- Initial Jobless Claims (13.30 London Time)
- Continuing Jobless Claims (13.30 London Time)
- FOMC Member Lockhart Speaks (17.30 London Time)
- FOMC Member Stanley Fischer Speaks (21.45 London Time)

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Purposeful inclusion Of December possibility and conveying of shallow trajectory in Oct FOMC, but lack of strong FOMC consensus in favor for Dec hike did not add/remove market conviction for December liftoff. There were three key takeaways from the October FOMC minutes:

1) The Fed policy makers purposefully included language into the October FOMC statement so as to emphasize “while no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting ”

2) It was noted in the minutes “that beginning the normalization process relatively soon would make it more likely that the policy trajectory after liftoff could be shallow… It was noted that the expected path of the federal funds rate, rather than the exact timing of the initial increase, was most important in influencing financial conditions and thus in affecting the outlook for the economy and inflation” and,

3) There remains significantly differing opinions among the FOMC members whether the necessary conditions have been met for normalizing/tightening policy as “some participants thought that the conditions for beginning the policy normalization process had already been met. Most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting. Nonetheless, they emphasized that the actual decision would depend on the implications for the medium-term economic outlook of the data received over the upcoming intermeeting period. Some others, however, judged it unlikely that the information available by the December meeting would warrant raising the target range for the federal funds rate at that meeting.

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Report ECB minutes:
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- Policymakers may not be gaining sufficient tractions to achieve the inflation target
- Must re-examine degree of policy accommodation in Dec and be ready to act if necessary
- Policymakers expect a delay in achieving the inflation target
- Revision of inflation outlook is potentially worrisome

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OUR MONTHLY ANALYSIS

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BULLISH TARGET 1 ARCHIVIED:

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REBOUND CONTINUATION

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Goldman Sachs put being long the dollar against the euro and yen as 2016's top trade, but dollar bulls may want to proceed with caution near-term. Dan Denbow at USAA Investments says the greenback might fall if the Fed raises next month in a case of buy the rumor, sell the news. He thinks the 7% gain versus the euro and 4% advance against the yen since mid-October may be "excessive even taking into account the growing possibility that the European and Japanese central banks may further loosen monetary policy to try to stimulate their faltering economies." In this case, a weaker dollar would stand to benefit commodities, along with emerging markets and US exporters, says Denbow.