The economic calendar for the upcoming week is not packed with significant events for the EUR/USD pair. Among the minor releases, only the JOLTS data for October and the weekly jobless claims data stand out.

However, this does not mean the week will be quiet and uneventful. On the contrary, we are about to enter a phase of heightened price volatility, as the Federal Reserve's December meeting results will be announced on Wednesday. Therefore, the upcoming week can be divided into two parts: before and after the meeting. In the first half of the week, the market will focus on expectations regarding the meeting, while in the second half, it will react to its outcomes. All other fundamental factors will take a back seat.

As noted earlier, market participants are virtually certain that the Fed will cut the federal funds rate by 25 basis points this month. The probability of this scenario currently stands at 86.2% (according to CME FedWatch data). Many Fed representatives, including Board members Christopher Waller, Stephen Miran, and Michelle Bowman, and New York Fed President John Williams and San Francisco Fed President Mary Daly, have spoken in favor of a rate cut, supported by various macroeconomic indicators we will discuss below.

It is important to note that the decision on the rate will not be unanimous. In the last two to three weeks, some central bank representatives (including Susan Collins, Lori Logan, Beth Hammack, and Jeff Schmidt) have advocated for a more cautious approach, suggesting that the rate should be kept steady. They pointed out inflationary risks and the September non-farm payrolls, some components of which came in positive.

Fed Chair Jerome Powell has been somewhat "above the fray" and has remained silent.

In my view, the main intrigue of the December meeting lies in the future pace of monetary easing. The outcomes of the December meeting are virtually predetermined. For instance, according to a Reuters survey, 89 out of 108 economists expressed confidence that the Fed would cut rates by 25 basis points in December. However, only 50 of them entertained the possibility that the Fed would take such a step again in the first quarter of next year. According to CME FedWatch data, the probability of an additional 25-basis-point cut in January (assuming a cut in December) is only 25%. Meanwhile, the prospects for a March cut are estimated at 40%.

Thus, if the Fed hints at further easing at one of its upcoming meetings following the December meeting, the dollar may face significant pressure, as the market is currently skeptical that cutting rates in December will lead the Fed to adopt a "dovish" stance and signal further steps in that direction.

The intrigue remains, meaning that the December Fed meeting will certainly provoke strong volatility—though the question remains whether it will benefit the dollar or work against it.

From a technical standpoint, the EUR/USD pair currently sits between the middle and lower lines of the Bollinger Bands indicator on the H4 timeframe, above the Kumo cloud, and between the Tenkan-sen and Kijun-sen lines. On the D1 timeframe, it is located between the middle and upper Bollinger Bands lines, above the Tenkan-sen and Kijun-sen lines, but within the Kumo cloud. Long positions are advisable only after the buyers of EUR/USD break above the middle Bollinger Band line on the D1 timeframe (1.1650). In that case, the pair will be positioned between the middle and upper Bollinger Bands lines on the H4 timeframe, as well as above all Ichimoku lines, forming a bullish "Parade of Lines" signal. Targets for the upward movement are 1.1690 (the upper Bollinger Bands line on H4) and 1.1730 (the upper boundary of the Kumo cloud on D1).