Fundamental analysis of EUR/USD

EURUSD has fluctuated significantly during the recent strong trading period, influenced by key economic indicators as well as expectations and statements from central bank officials.
This movement comes ahead of important events and statements that are expected to have an impact on the currency pair. The European Central Bank is looking forward to President Christine Lagarde's next speech. The reason for this is that she previously dismissed rate cut talks, indicating that no rate cut is expected in the second quarter. Deviations from this stance are expected to have a significant impact on the EUR/USD pair. In addition, statements from ECB Governing Council member Elizabeth McColl and Bundesbank President Joachim Nagel, as well as ECB Policy Director Robert Holtzmann, took into account October's weak inflation data in the euro region and weak macroeconomic conditions. 
Meanwhile, attention turned to the US Federal Reserve. The publication of the FOMC meeting minutes is eagerly awaited, especially as US inflation and trade data reinforced the view that the Fed may cut interest rates in May. This outlook was supported by CME Group's FedWatch tool, which showed that the probability of a rate cut rose 25 points over the week, from 30% to 47%. Markets are also awaiting clarity on the rest of the Fed's stance, especially as the 3.9% unemployment rate reflects the state of the U.S. labor market. The Fed's tendency to keep interest rates high could lead to a reduction in the money supply, which would negatively impact consumer spending and inflation. Other data such as US home sales and the Chicago Fed National Activity Index are also indicative. If it turns out to be unsatisfactory, the Fed may adopt a new interest rate policy. 
Amid these expectations, EURUSD entered a consolidation phase, trading around 1.09450, the highest level since August 14. The dollar remained under pressure, reflecting growing confidence that the Fed's monetary tightening may finally be coming to an end. The yield on 10-year U.S. Treasury bonds hit a two-month low as expectations of future Fed policy and the risk environment pressured the dollar. However, Fed officials, including FRB Richmond President Thomas Barkin, did not rule out the need to raise interest rates again if supported by economic data. In the Eurozone, the EUR/USD exchange rate is heavily influenced by US Dollar movements due to a lack of important market-moving data. The release of US home sales data was anticipated by the market, but market attention remains focused on Lagarde's speech in Berlin and the important Federal Open Market Committee (FOMC) meeting minutes. 
Overall, the fundamental backdrop seems to support a positive outlook for EURUSD, with large corrections seen as buying opportunities. EUR/USD's advance may hinge on the outcome of the FOMC and ECB meeting minutes, while November's private sector PMI will help decide who cuts interest rates for the first time in 2024. 
Technical analysis and scenarios:

EUR/USD is currently trading just above the middle Bollinger Band, indicating a neutral stance between bullish and bearish sentiment. The flattening of the Bollinger Bands suggests that volatility is declining and the pair may enter a consolidation phase.
The Stochastic indicator is above the 77 level, indicating that the market is currently in overbought territory. However, as the Stochastic value is above the signal, there is still momentum for a possible upside move, but traders should be cautious of a potential reversal.
The MACD value is slightly below the signal line, which could be a bearish signal. However, the values are very close, indicating weak momentum and therefore a less reliable indicator of a strong directional move at the moment.
Main scenario (BUY)
Recommended entry level : 1.10000
Take Profit: 1.10500
Stop Loss: 1.09750
Alternative scenario (SELL)
Recommended entry level: 1.08820
Take Profit: 1.08275
Stop loss: 1.09000