There is no wonder that the currency market stagnated. Today, the US is celebrating Thanksgiving Day. As a rule, trading activity is extremely low without US traders.
At the same time, Europe has not published any news and the macroeconomic calendar is absolutely empty. However, four members of the ECB, including Christine Lagarde, will provide a speech today. The regulator may announce its decision to raise the key interest rate in the near future.
It is quite possible that the ECB has chosen this day for numerous speeches to avoid panic in the market and provide investors with time to think over the information. Even if the regulator makes the expected announcements, market participants will price them only tomorrow or on Monday.
Notably, during several years, the ECB has been assuring traders that it will hardly raise the benchmark rate until 2023.
Let us take a look at the trading charts.
After a short-lived hovering within the range of 1.1225/1.1275, the euro/dollar pair broke the lower limit. As a result, the pair continued falling, thus boosting the volume of short positions.
On the daily chart, we see an inertial movement. In the last two weeks, the euro has lost over 3.5%. Such a significant change in a short period of time points to oversold conditions and may cause a technical correction.
Since the euro/dollar pair has significantly dropped and a correctional movement has not started yet, the downtrend is likely to slacken. In this case, the pair may either stagnate or climb by 100 pips.
The area of 1.1160/1.1180 is acting as support for sellers.
Meanwhile, speculators of the pound/dollar pair broke the support level of 1.3350. As a result, the pair began falling. The pound sterling is not as oversold as the euro.
It is quite possible that traders are locking in positions at 1.3350. If the price fixes below the mentioned level, it may slide even deeper. The alternative scenario will become possible if the price starts a correctional movement. Once the pair consolidates above 1.3360 on the four-hour chart, traders will receive a buy signal.