Buying EURUSD due to expectations of Fed rate cuts

The US labor market remained stagnant in September with low hiring and layoffs levels, although the economy may be on a more sustainable trajectory than expected, as Federal Reserve (Fed) Chairman Jerome Powell said on Tuesday. He also noted that the Fed will carefully weigh its interest rate decisions at each meeting, as the regulator needs to balance weak employment figures with persistently above-target inflation.

Powell highlighted an economic dilemma that has divided the central bank's officials almost evenly between those more concerned about still-rising consumer prices and those worried about a collapsing US labor market. The Fed's head also noted a new challenge: the latest data on economic activity was better than expected, but this has not yet led to a resumption of job growth.

For now, the regulator will act in the absence of official data due to the US government shutdown. In Powell's opinion, the central bank has enough information for the upcoming Fed meeting on October 28–29, but if the suspension continues, the lack of October figures will be more significant. The Trump administration recently informed the Bureau of Labor Statistics that it may release the Consumer Price Index report for September. It is now due on October 24, just a few days before the Fed's next monetary meeting. The tone of Powell's comments indicates his inclination towards policy easing. This strengthens investors' expectations of interest rate cuts and supports EURUSD in the medium term.

The overall recommendation is to buy EURUSD. Profits should be taken at the level of 1.18330. Stop Loss could be set at 1.14500.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.