The final week of November promises to be both intense and volatile. As is customary, critical macroeconomic data are released at the end of each month, and this November will be no exception. Major reports for the upcoming trading week include the Eurozone inflation report, CB Consumer Confidence, FOMC minutes, IFO indices, Germany's inflation data, and the Core PCE Index.

Monday

Germany will release its IFO indices, which, while less significant than the PMI, may still add to the bearish sentiment on the euro. Preliminary forecasts suggest further deterioration: the Business Climate Index is expected to decline to 86.1 (after an unexpected rise to 86.5), while the Current Expectations Index may drop to 86.9 (after rising to 87.3).

These figures will impact EUR/USD only if the decline is significantly worse than expected, pushing the indices into the "red zone."

Tuesday

The key release for Tuesday is the US CB Consumer Confidence Index. After reaching 105.6 in August, the index fell unexpectedly to 99.2 in September before rebounding to 108.7 in October. November forecasts suggest an increase to 112.0—the highest since July 2023. If realized, this could support the dollar by reinforcing expectations for a pause in the Federal Reserve's December meeting.

Additionally, the FOMC meeting minutes will be published during the late US trading session. Recall that the Fed lowered rates by 25 basis points during its November meeting, following a broadly anticipated scenario. At the same time, the central bank voiced rather vague wording, stating that it is ready to adjust the monetary policy "in the event of risks that may prevent the achievement of the inflation target."

But! Just a few days after the meeting, Fed Chair Jerome Powell, speaking at a conference in Dallas, stunned the markets with a more straightforward statement, announcing that the central bank might not rush with further rate cuts. The dollar could gain significant support if the minutes echo Powell's more hawkish stance. It is important to clarify that it was Powell who provoked the bearish momentum for the EUR/USD pair (after the passions over Trump's election had died down), so the Fed's minutes may strengthen, so to speak, the Powell effect.

Wednesday

The US will publish durable goods orders for October during the US session on Wednesday. Total orders are expected to grow by 0.4% after a 0.8% decline in September. Excluding transportation, orders should rise by 0.2% after a 0.4% increase in the previous month.

Also, the second estimate of US GDP in the third quarter will be published. According to forecasts, the second estimate will coincide with the initial one (2.8%). However, forecasts "don't work" quite often here. For example, the first quarter figures were revised twice. If it turns out that the US economy grew at a slower pace in the third quarter, the dollar will be under background pressure. However, in the opposite case, if the release is "green," the greenback will receive significant support (the effect will be more important) – the market will again talk about a pause at the December Fed meeting.

Another important release on Wednesday is the core PCE index. As is known, this is one of the key inflation indicators that the Fed closely monitors. In October, it came out at 2.7%, while most experts predicted a decline to 2.6%. November forecasts suggest it will hold at 2.7%. Suppose the index does move from dead center towards growth. In that case, representatives of the "hawkish wing" of the Fed (in particular, we are talking about Michelle Bowman and Lisa Cook) will have another argument to defend their position, expressed in maintaining the monetary policy in its previous form in December. If the core PCE index accelerates simultaneously with a slowdown in inflation in the eurozone (the report will be published on Friday), a "perfect storm" will form, strengthening the downward trend of EUR/USD.

Thursday

Germany will publish its November inflation data, which often serves as a harbinger for broader Eurozone inflation trends. According to forecasts, the indicators will reflect general inflation's stagnation and core inflation's acceleration. The overall Consumer Price Index (CPI) is expected to remain flat at 2.0% YoY. At the same level, the index was released in September. The Harmonized Index of Consumer Prices (HICP) is projected to accelerate slightly to 2.6% from 2.4%. It should be noted that the report on inflation growth in Germany is a kind of "storm herald" ahead of the release of pan-European data, as the figures are quite often correlated. Therefore, if, contrary to forecasts, German inflation unexpectedly slows, it could weigh heavily on the euro.

Friday

Friday is the most important day of the week for the euro. The report on inflation growth in the eurozone will be released during the European session. The overall CPI is expected to accelerate to 2.3% YoY in November from 2.0%. The Core CPI (excluding energy and food) is forecast to rise to 2.8% after being stuck at 2.7% for two months.

The significance of this release cannot be highlighted enough. If inflation slows instead of accelerating, it could tilt the scales in favor of a 50-basis-point rate cut at the European Central Bank's December meeting (on the back of disappointing PMIs). If the report comes out at the forecast level or (even more so) in the green zone, a 25-point rate cut will remain the baseline scenario.

Conclusions

The upcoming week will likely be volatile. The dollar may get additional (and very significant!) support if the Fed minutes are hawkish, the core PCE index is in the green zone, and the second estimate of US GDP is better than the initial one. As for the euro, everything will depend on the inflation dynamics in Germany and the eurozone. These reports will be pivotal in determining the single currency's direction.

From a technical point of view, the EUR/USD pair on all higher timeframes (from H4 and above) remains near or below the lower bands of Bollinger Bands and beneath all Ichimoku indicator lines, signaling a bearish trend. However, it should be remembered that a corrective pullback usually follows such a powerful price decline. While a strong downward move often precedes a corrective pullback, the current fundamental landscape suggests that such corrections are opportunities to open short positions with the targets of 1.0400 (lower Bollinger Bands line on the four-hour chart) and 1.0380 (lower Bollinger Bands line on the daily chart).