The EUR/USD pair remains in a sideways range that is clearly visible to any trader on any chart. This range was highlighted in the morning articles. Even on the daily chart, it is clear that trading over the past month has taken place between the 1.1114 and 1.1269 levels. Thus, the market has found a certain equilibrium zone. Breaking out of this zone will require major events. The nearest and, effectively, the only such event is tomorrow's US inflation report.

In my view, the market has already priced in the Fed's hawkish scenario several times. This is precisely why the US dollar has failed to resume its advance despite strong unemployment and labor market reports. A strong labor market means that the Fed can continue tightening monetary policy with greater confidence and raise interest rates further than it could with a weak labor market. However, how much longer can the dollar continue to rise for this single reason, and how many more hawkish steps does the market expect from the FOMC? Geopolitical tensions in the Middle East are once again moving closer to a ceasefire, meaning that traders are unlikely to use the dollar as a safe-haven asset. Everything suggests that it is high time for the bears to retreat, at least temporarily.

Over the past two months, the news background has often favored the euro, but this has had no impact on its exchange rate. Last week, it became known that the Republican Party had suffered a crushing defeat in the elections, while inflation in the European Union had accelerated to 4%. The US Congress will now be divided, and Democrats and Republicans are about as likely to reach an agreement as cats and dogs. As a result, many important government decisions may now face significant delays. Higher inflation in the European Union points to further monetary policy tightening by the ECB, which is also a bullish factor. If the market is pricing in an FOMC rate hike, it should also be pricing in an ECB rate hike. However, over the past few months, cause-and-effect relationships have been far from consistent.

It is worth recalling that one of the main reasons behind the dollar's appreciation over the past three months was the Fed's hawkish stance. However, in reality, its stance is not particularly hawkish compared with those of other central banks. For example, the ECB is set to deliver its third rate hike in December, while the Bank of England has only just begun its monetary policy tightening cycle, suggesting that further rate increases could be more substantial in the near future. The pound sterling is taking all these factors into account, whereas the euro is not.

At present, there are no signs that the bearish advance is coming to an end. Imbalance 24 remains valid, and the price may still react to it, potentially generating a sell signal. Bulls need to invalidate Imbalance 24 and form bullish patterns before they can expect even a modest recovery. This would require a sharp upward move in the euro, which is still not visible. The liquidity sweep above 1.1270 and strong US labor market data triggered another wave of bearish attacks. Bulls are left hoping for another liquidity sweep below the recent lows.

Overall, the news background continues to favor the bulls, in my view. Although the Fed has adopted a more hawkish monetary policy stance, this is not the only factor influencing exchange rates. Friday's economic data gave the bears another opportunity to launch an attack, which they readily seized. On Monday, the bears received no additional support, allowing the euro to recover slightly. However, all price movements in recent weeks have remained within the sideways range. Therefore, this could simply be ordinary market noise and a period of consolidation before a new trend emerges.

Economic Calendar for the US and the European Union:

• US – Consumer Price Index (13:30 UTC).

On November 10, the economic calendar contains just one release, which is the most important event of the week. Economic data could have a significant impact on market sentiment on Tuesday, particularly in the second half of the day.

EUR/USD Forecast and Trading Tips:

In my view, the pair remains in the process of forming a bullish trend that has entered a corrective pause lasting an entire year. The news background shifted sharply in favor of the bears eight months ago, but the trend, which has been in place for four years, cannot yet be considered invalidated or complete. Bulls may resume their advance before the end of the year, but their current opportunities are limited to the 1.1066 low established in June last year and the 1.1105 low established two weeks ago.

As for the bears, they currently have Imbalance 24 and a liquidity sweep above the latest peak working in their favor. No trading signals have formed in recent days, but within a horizontal range, this is not necessarily a bad thing. Trading requires patterns and signals, not sideways price action.