The EURUSD rally has finally seen a pullback as the big psychological number 1.2000 has proven to provide a good catalyst for the bullish trend to take a pause. The main driver behind the EURUSD pullback was the grown speculations that the Fed might proceed forward and hike rates one more time until the 2017 end. The market has been speculating that the ECB will announce this autumn the tapering process of the 2.3 trillion euro bond buying program, but the ECB rhetoric has failed to gain traction behind this market theme.

The market focus is now shifting to a new month – November which can provide us with plenty of fundamental drivers that can impact the market volatility and the EURUSD exchange rate. The November economic calendar has scheduled plenty risk events that can be the catalyst for some volatility. Both the ECB and the Fed have important interest rates and monetary policy announcements. The Fed has one of the last chances to signal its willingness to hike one more time until the end of the year.

The Fed funds rate is only projecting rates to hike in December but we can still see the dollar getting traction in anticipation of higher interest rates. The November seasonal pattern sees the EURUSD exchange rate slowly drifting lower and its possible the current retracement to have more legs to the downside if the fundamentals support the bearish case.

The seasonal pattern only gives us the tendency of a particular currency to exhibit a certain behavior at a certain time, so we have to carefully monitor the pattern and how the fundamental forces interact with the price action. Going forward, we’re going to analyze and disseminate the major news event for the upcoming month that can be the catalyst for higher EURUSD volatility.

“Don’t risk significant money in front of key reports, since that is gambling not trading.”
– Paul Tudor Jones

Monthly Forex News Events that Might Affect EURUSD Volatility – Nov  2017

The Catalan independence issue has failed so far to provide us with a market theme that can drive the currency exchange rate in a significant manner. Spain is already facing one of the most severe constitutional crises and as soon as the other market participants start to recognize this, expects the market to also pay attention.

As long as the EURUSD exchange stays below the big round number 1.2000, it’s not wrong to expect the bearish momentum to continue to dominate during the coming month. We have plenty of risk events that have the potential to set the stage for big movements in the Forex market and here are the most notable ones:

• Wednesday, November 1, 2017 –The Fed interest rate decision is scheduled right on the first day of the new trading month. The Fed has signaled that the interest rates will continue to go higher and it seems that the most powerful central bank in the world is committed to the idea of reducing its balance sheet. While the rates are expected to be kept on hold at November’s meeting, expect the Fed to signal that they will rise one more time in December which can be a strong bullish catalyst for the US dollar.
• Friday, November 3, 2017 – The NFP report is the highlight of the day. After a disastrous -33k NFP reading the market consensus is for a positive NFP figure of 160k. We can also expect a revision higher of the previous reading. The unemployment rate is expected to come flat at 4.2%, the lowest level since December 2000.
• Monday, November 6, 2017 – Fed Chairman Janet Yellen is expected to deliver a speech to the Center for the Study of Democracy. The topic of her speech will be Economic Inequality in the United State.
• Wednesday, November 15, 2017 – The EUGDP figures for the 2017 3rd quarter are scheduled to be released. According to the IMF upgraded forecast the European Union economic growth is projected to be in the vicinity of 2.1%.
• Wednesday, November 15, 2017 – The US CPI inflation figures are another major risk event. The US inflation rose by 0.5% in the previous month while the CPI annualized rate stands at 2.2%. The elevated levels of inflation will likely keep the Fed on track to raise rates one more time this year.
• Wednesday, November 22 – The FOMC minutes will give us further clues into the Fed’s monetary policy.
• Wednesday, November 29, 2017 – The US GDP figures for the 2017 3rd quarter are scheduled to be released. The US economy is expected to grow by 2.4% which weaker than the Q2 reading of 3.1% increase.