The US Dollar continues to struggle as downward pressure mounts and pushes the DXY Index to a new monthly low. USD price action weakened against its counterparts like EUR, GBP. This move appear largely driven by a continuation of prevailing trends such as waning demand for safe-haven currencies like the US Dollar.

The minutes of the 4-5 November FOMC meeting were just released and did little to spur a market reaction. At the November FOMC meeting, members maintained optionality on future changes to its asset purchase programme, the topic of which has been the main focus of markets as of late, saying that it could tweak the pace, maturity or duration of purchases going forward. Many members favored enhanced bond-buying guidance fairly soon, while “several” others expressed concerns that a significant expansion in asset holdings could have unintended consequences.

While the minutes are now out of date, given that the meeting happened before this month’s positive vaccine news, by choosing to maintain optionality regarding tweaks to its QE programme the Fed may be bolstering expectations for action at the December meeting. This, in line with the more dovish tone taken by FOMC members as of late (given the lack of fiscal stimulus and rising virus cases), is likely to weigh on USD going forward.

The number of Americans filing first-time claims for jobless benefits increased further last week, suggesting that an explosion in new COVID-19 infections and business restrictions were boosting layoffs and undermining the labor market recovery.

Other data out on Wednesday showed the economy got off to a solid start in the fourth quarter, with consumer spending and business investment in equipment topping analysts’ expectations in October. Businesses also reported a sharp rebound in profits in the third quarter.

The dollar has come under pressure in recent months from expectations that U.S. interest rates will remain near historic lows for years to come, and as news of various COVID-19 vaccines helped boost investors’ appetite for riskier currencies.

EUR/USD 4 Hour Chart:

Support: 1.1893 (S1), 1.1863 (S2), 1.1845 (S3).

Resistance: 1.1941 (R1), 1.1959 (R2), 1.1989 (R3).

All the catalysts creates pressure for the greenback against Euro, we expect a bullish trend for EUR/USD.