EUR/USD Price Analysis – Nov 04, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair extended its upward trend, maintaining strong support around 1.0903 and reaching an intra-day high of 1.0905. This bullish momentum is primarily fueled by a strong Euro currency, which has gained traction following positive Eurozone economic data that alleviated concerns about significant rate cuts by the European Central Bank (ECB) in December.
Moreover, the rise in the EUR/USD pair accelerated as the US Dollar weakened amidst growing uncertainty ahead of the upcoming US presidential election on Tuesday and the Federal Reserve's monetary policy meeting on Thursday.
Euro Strengthens as Positive Economic Data Reduces Rate Cut Expectations
As we mentioned the bullish trend in the Euro currency has been backed by positive recent economic data from the Eurozone, which reduced expectations of large interest rate cuts by the European Central Bank (ECB) in December.
On the data front, the Eurozone’s economy grew faster than expected in the third quarter, with Gross Domestic Product (GDP) performing better than forecasted. This stronger-than-expected growth has led traders to scale back their expectations for a major interest rate cut of 50 basis points in December.
Furthermore, October’s inflation rate increased to 2%, further challenging the need for a steep rate cut by the ECB. Moreover, manufacturing in both Germany and the Eurozone improved, as shown by the final October PMI (Purchasing Managers' Index) data. In the meantime, Sentix Investor Confidence, a key sentiment indicator, also showed slight improvement, moving from -13.8 in October to -12.8 in November, though it remains in negative territory.
Therefore, the positive economic data from the Eurozone, along with reduced expectations for significant rate cuts, is likely to strengthen the Euro (EUR) against the US Dollar (USD). This could lead to upward momentum for the EUR/USD currency pair.
US Dollar Weakens Amid Election Uncertainty, Boosting EUR/USD Pair
On the US front, the broad-based US dollar edged lower on the day as uncertainty grows ahead of the US presidential election on Tuesday and the Federal Reserve's (Fed) monetary policy meeting on Thursday.
The US Dollar Index (DXY) fell below 103.70 as market participants anticipated a close race between former President Donald Trump and current Vice President Kamala Harris. However, the recent poll showed Harris leading Trump by three points in Iowa, which is significant since Trump won the state easily in the past two elections.
Traders think that if Trump wins, it could boost the US dollar and Treasury yields. This is because he wants to raise tariffs and cut taxes, which could lead to higher inflation and prompt the Federal Reserve to tighten its monetary policy.
On the other hand, if Harris wins, it is seen as a continuation of current policies, which would benefit risk-sensitive currencies. Regarding the Fed's upcoming meeting, traders expect a rate cut of 25 basis points, bringing rates down to between 4.50% and 4.75%.
Investors are also looking forward to the release of the ISM Services Purchasing Managers’ Index (PMI) for October, which is projected to show slower growth than the previous month.
Therefore, the US dollar's decline, driven by election uncertainty and expectations of a rate cut, is likely to support the Euro (EUR) against the US dollar (USD), pushing the EUR/USD pair higher.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.08958, up 0.59% on the day, as it moves just below a key pivot level at $1.09022. This pivot is a critical indicator for the pair’s potential direction. Immediate resistance lies at $1.09128, followed by higher resistance levels at $1.09231 and $1.09316.
A break above these levels would suggest continued bullish momentum, supported by an RSI reading of 61, indicating that the pair is approaching overbought territory. However, if EUR/USD manages to surpass the 1.09128 resistance, it could attract further buying interest.
On the downside, immediate support is found at $1.08845, with additional support at $1.08695 and a more substantial base at $1.08578, just above the 50-day Exponential Moving Average (EMA) of $1.08677.
The 50 EMA serves as a strong support level and could stabilize the pair if selling pressure increases. Current market sentiment remains influenced by the Eurozone’s economic outlook and dollar movements, with investors watching closely for cues from both the European Central Bank and the U.S. Federal Reserve.
Traders should consider the pivot point at $1.09022 as the deciding factor; a break below may signal selling opportunities, targeting $1.08770. Conversely, a sustained move above $1.09128 could reinforce a bullish trend, with the potential to reach higher resistance levels.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Critical Pivot Level: The $1.09022 pivot will likely determine EUR/USD’s next move.
- Resistance Outlook: Immediate resistance at $1.09128; further gains could test higher levels.
- Support from EMA: The 50 EMA at $1.08677 offers strong support, signaling stability.
The EUR/USD pair is trading at $1.08958, up 0.59% on the day, as it moves just below a key pivot level at $1.09022. This pivot is a critical indicator for the pair’s potential direction. Immediate resistance lies at $1.09128, followed by higher resistance levels at $1.09231 and $1.09316.
A break above these levels would suggest continued bullish momentum, supported by an RSI reading of 61, indicating that the pair is approaching overbought territory. However, if EUR/USD manages to surpass the 1.09128 resistance, it could attract further buying interest.
On the downside, immediate support is found at $1.08845, with additional support at $1.08695 and a more substantial base at $1.08578, just above the 50-day Exponential Moving Average (EMA) of $1.08677.
The 50 EMA serves as a strong support level and could stabilize the pair if selling pressure increases. Current market sentiment remains influenced by the Eurozone’s economic outlook and dollar movements, with investors watching closely for cues from both the European Central Bank and the U.S. Federal Reserve.
Traders should consider the pivot point at $1.09022 as the deciding factor; a break below may signal selling opportunities, targeting $1.08770. Conversely, a sustained move above $1.09128 could reinforce a bullish trend, with the potential to reach higher resistance levels.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.09021
Take Profit – 1.08770
Stop Loss – 1.09169
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$251/ -$148
Profit & Loss Per Mini Lot = +$25/ -$14
EUR/USD Price Analysis – Nov 01, 2024
Daily Price Outlook
Despite the positive Eurozone data, the EUR/USD currency pair struggled to maintain its upward momentum, declining from a fresh two-week high to around 1.0855 on Friday. This downturn can be attributed to a rebound in the US Dollar, fueled by upbeat US economic data.
Meanwhile, investors seem cautious ahead of the upcoming US Nonfarm Payrolls (NFP) and the ISM Manufacturing Purchasing Managers’ Index (PMI) data for October, set to be released in the New York session.
Conversely, the shared currency has performed well against other currencies, bolstered by faster-than-expected Eurozone GDP growth in the third quarter and inflation data that exceeded forecasts. These developments have led traders to reassess expectations regarding larger-than-usual rate cuts by the European Central Bank (ECB) at its December policy meeting. This reassessment has been a key factor in limiting deeper losses for the EUR/USD pair.
EUR/USD Outlook Amid Eurozone Growth and US Dollar Recovery
On the EUR front, the shared currency maintains its bullish trend but failed to keep the EUR/USD pair above its two-week high and lost traction due to a recovery in the US Dollar.
However, the shared currency has shown strong performance against other currencies, supported by several factors including faster-than-expected Eurozone GDP growth of 0.9% in the third quarter and higher-than-expected inflation. This have led traders to rethink their expectations for larger rate cuts by the European Central Bank (ECB) in December.
According to Eurostat, the Eurozone economy grew faster than last quarter, mainly thanks to a strong showing from Germany. This growth reduces the chances of an immediate economic downturn, though uncertainty remains ahead of the upcoming US presidential election.
If former President Donald Trump wins against current Vice President Kamala Harris, Eurozone exports may be affected, as Trump has proposed a universal 10% tariff on all nations, except China, which would face even higher tariffs. Additionally, inflation in the Eurozone increased to 2% in October, up from 1.7% in September, further supporting the euro.
Therefore, the stronger euro from positive GDP growth and rising inflation supports the EUR/USD pair. However, the US Dollar's recovery and potential trade tariffs from a Trump presidency create uncertainty, limiting the euro's ability to maintain gains above the recent high.
Impact of US Economic Data on EUR/USD Pair
On the US front, the broad-based US Dollar regained its ground as investors showed caution ahead of the upcoming US Nonfarm Payrolls (NFP) and ISM Manufacturing Purchasing Managers’ Index (PMI) data for October. Economists expect the US economy to have added 113,000 jobs, significantly lower than the 254,000 increase seen in September.
In the meantime, the unemployment rate is predicted to remain steady at 4.1%. These employment figures are crucial since they could affect market expectations about the Federal Reserve's interest rate decisions.
Traders are largely pricing in a 25 basis point rate cut at the Fed’s next meeting on Thursday. However, the NFP data could impact the outlook for the December meeting. If payroll data is stronger than expected, it may reduce bets on rate cuts, while weaker numbers could boost them.
Investors are also focusing on Average Hourly Earnings data for October, which is expected to show a 0.3% month-on-month increase, slower than September’s 0.4%. Additionally, the ISM Manufacturing PMI is projected to rise slightly to 47.6, indicating ongoing contraction but at a slower pace.
Therefore, the US Dollar's recovery, coupled with weaker-than-expected job growth forecasts, puts downward pressure on the EUR/USD pair. If the Nonfarm Payrolls data is strong, it could strengthen the Dollar further, leading to additional declines in the EUR/USD pair.
EUR/USD – Technical Analysis
EUR/USD is experiencing slight downward pressure, currently trading at $1.08743, a modest 0.08% decline. The pair hovers around the pivot point of $1.08881, which serves as a key indicator for short-term direction.
Immediate resistance is seen at $1.08992, and should this level be breached, the next resistance targets lie at $1.09105. A sustained break above these levels would likely signal stronger bullish momentum, potentially propelling EUR/USD further up.
Conversely, if the pair fails to rise above $1.08881, it could dip towards immediate support at $1.08611. Further downside targets include $1.08456 and $1.08315, where buying interest might emerge.
The RSI is currently at 54, suggesting a balanced momentum with no strong bias in either direction. Meanwhile, the 50-day EMA sits at $1.08580, providing additional support in the event of further declines.
Given the technical landscape, a tactical entry above $1.08701 could offer potential gains, targeting $1.08988 with a conservative stop loss at $1.08518. This setup offers an opportunity to capture gains if the euro stabilizes and tests higher levels.
This technical outlook suggests a cautiously bullish approach for EUR/USD, with close attention to the pivot point at $1.08881 as the key level that may determine near-term direction.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: Immediate resistance at $1.08992, with additional levels at $1.09105.
- Support Levels: Key support at $1.08611, followed by lower levels at $1.08456 and $1.08315.
- RSI: At 54, indicating neutral momentum, suggesting no strong directional bias.
EUR/USD is experiencing slight downward pressure, currently trading at $1.08743, a modest 0.08% decline. The pair hovers around the pivot point of $1.08881, which serves as a key indicator for short-term direction.
Immediate resistance is seen at $1.08992, and should this level be breached, the next resistance targets lie at $1.09105. A sustained break above these levels would likely signal stronger bullish momentum, potentially propelling EUR/USD further up.
Conversely, if the pair fails to rise above $1.08881, it could dip towards immediate support at $1.08611. Further downside targets include $1.08456 and $1.08315, where buying interest might emerge.
The RSI is currently at 54, suggesting a balanced momentum with no strong bias in either direction. Meanwhile, the 50-day EMA sits at $1.08580, providing additional support in the event of further declines.
Given the technical landscape, a tactical entry above $1.08701 could offer potential gains, targeting $1.08988 with a conservative stop loss at $1.08518. This setup offers an opportunity to capture gains if the euro stabilizes and tests higher levels.
This technical outlook suggests a cautiously bullish approach for EUR/USD, with close attention to the pivot point at $1.08881 as the key level that may determine near-term direction.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.08701
Take Profit – 1.08988
Stop Loss – 1.08518
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$287/ -$183
Profit & Loss Per Mini Lot = +$28/ -$18
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Key Insight: EUR/USD hovers near its pivot, suggesting a neutral stance with cautious bias.
- Key Levels: Immediate resistance at $1.08382; immediate support at $1.07986.
- Outlook: Mildly bearish, with selling interest likely below $1.08223.
The EUR/USD pair is trading just below the pivot point of $1.08223, marking a cautious stance as it edges lower in today’s session. Immediate resistance is noted at $1.08382, with further resistance levels at $1.08568 and $1.08738.
The 50-period Exponential Moving Average (EMA) at $1.08101 aligns closely with the current price, suggesting a tentative neutral bias. The Relative Strength Index (RSI) sits at 52, indicating balanced momentum without strong overbought or oversold signals.
Should the pair sustain a drop below $1.08223, it may attract further selling interest, potentially pushing it toward immediate support at $1.07986. A break beneath this level could open doors to additional downside toward $1.07858 and $1.07686.
Traders may consider short positions below $1.08223, targeting $1.07864, while setting a stop loss around $1.08414 to guard against unexpected volatility. Watch for price action near the pivot for early indications of market direction.
EUR/USD trades near its pivot, with potential for further downside if support levels are broken.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08223
Take Profit – 1.07864
Stop Loss – 1.08414
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$359/ -$191
Profit & Loss Per Mini Lot = +$35/ -$19
EUR/USD Price Analysis – Oct 30, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend, remaining well bid around 1.0832 and reaching an intra-day high of 1.0859.
This bullish rally can be attributed to positive Eurozone growth data, which indicated that the economy surprisingly grew in the third quarter after contracting in the April-June period.
Moreover, gains in the EUR/USD pair accelerated as the bullish rally in the US dollar appeared to have slowed and faced bearish pressure following weak JOLTS Job Openings data for September.
EUR/USD Rises on Positive Eurozone GDP Data and Lower Rate Cut Expectations
On the EUR front, the shared currency gained strong bullish traction, with the EUR/USD rising strongly near the 1.0850 level. This surge is mainly due to positive Gross Domestic Product (GDP) data showing that the Eurozone economy grew unexpectedly in the third quarter after contracting earlier in the year.
In the meantime, the German economy expanded by 0.2%, surprising economists who had predicted a 0.1% decline. However, the Eurozone overall grew by 0.4% in the three months ending in September, following a 0.2% growth in the previous quarter.
Meanwhile, the bloc's GDP rose at an annual rate of 0.9% in Q3, compared to 0.6% in Q2 and the expected 0.8%. Year-on-year, German GDP contracted at a slower rate of 0.3% after flat growth in Q2. Additionally, the preliminary Harmonized Index of Consumer Prices (HICP) data for Germany showed higher-than-expected inflation.
These positive developments have reduced expectations for a significant interest rate cut by the European Central Bank (ECB) in December, with the likelihood of a 50 basis point cut now dropping to 22% from 45%. However, concerns about the Eurozone's economic outlook remain among investors.
EUR/USD Boosted by Bearish US Dollar and Weak Job Data
Another factor that has been boosting the EUR/USD pair is the bearish US dollar, which has lost its momentum following weak JOLTS Job Openings data for September, raising concerns about the labor market.
The data revealed that job openings dropped to 7.443 million, below the expected 7.99 million and down from the previous 7.861 million. This decline in job openings suggests a slowdown in labor demand and supports expectations that the Federal Reserve may keep interest rates low for the rest of the year.
Moving on, investors are looking ahead to key reports like the ADP Employment Change and the flash US Q3 GDP data, which will be released during the North American session.
Economists predict the private sector added 115,000 new jobs in October, down from 143,000 in September. Furthermore, the US economy is expected to grow at a steady annualized rate of 3.0%.
EUR/USD – Technical Analysis
The EUR/USD pair is trading just below the pivot point of $1.08223, marking a cautious stance as it edges lower in today’s session. Immediate resistance is noted at $1.08382, with further resistance levels at $1.08568 and $1.08738.
The 50-period Exponential Moving Average (EMA) at $1.08101 aligns closely with the current price, suggesting a tentative neutral bias. The Relative Strength Index (RSI) sits at 52, indicating balanced momentum without strong overbought or oversold signals.
Should the pair sustain a drop below $1.08223, it may attract further selling interest, potentially pushing it toward immediate support at $1.07986. A break beneath this level could open doors to additional downside toward $1.07858 and $1.07686.
Traders may consider short positions below $1.08223, targeting $1.07864, while setting a stop loss around $1.08414 to guard against unexpected volatility. Watch for price action near the pivot for early indications of market direction.
EUR/USD trades near its pivot, with potential for further downside if support levels are broken.
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EUR/USD Price Analysis – Oct 28, 2024
Daily Price Outlook
The EUR/USD currency pair continued its upward trend, attracting strong bids around the 1.0820 level as the US dollar lost traction and dropped from an almost three-month high. However, the outlook for the US dollar remains strong amid risk-off market sentiment ahead of the US presidential election.
Meanwhile, the Euro is trading sideways ahead of a data-packed week, during which traders will receive key economic growth and inflation figures for both the US and the Eurozone.
Economic Outlook for the Eurozone and Its Impact on the EUR/USD Pair
On the EUR front, the shared currency is largely moving sideways as traders anticipate a busy week of economic data, including growth and inflation figures for both the United States and the Eurozone. These economic indicators are important because they often influence interest rate decisions.
In the Eurozone, investors are particularly focused on economic growth data, as inflation is expected to stay close to the European Central Bank's (ECB) target of 2%. Economists project the Eurozone economy will grow by 0.8% year-on-year, an increase from the 0.6% seen in the second quarter, with growth expected to hold steady at 0.2% compared to the previous quarter.
Germany, the largest economy in the Eurozone, is anticipated to see a decline of 0.3% in Q3, which could weigh on overall growth. In light of this, ECB policymaker and Bundesbank President Joachim Nagel highlighted the importance of implementing a growth package recently announced by the German government to support the economy.
He noted that while a significant 50-basis points interest rate cut might be considered in December, decisions will depend on several factors, including the US presidential election results and inflation data.
Therefore, the anticipated economic growth and inflation data in the Eurozone could lead to fluctuations in the EUR/USD pair. If growth exceeds expectations, it may strengthen the Euro, while weak German performance could weigh on the Euro, leading to volatility.
Impact of US Economic Outlook on the EUR/USD Pair
On the US front, the US dollar has dropped and showed mild bearish trend. Despite this decline, the outlook for the US Dollar remains strong as investors adopt a risk-averse stance with the US presidential election just a week away. Central bankers discussed the potential implications of a former President Donald Trump victory over current Vice President Kamala Harris during panels at the recent IMF meeting.
Many traders view this scenario positively for the US Dollar, as Trump has promised to increase tariffs by 10% on all countries except China, which would face even steeper tariffs of 60%.
In addition to election-related uncertainties, the US Dollar's direction will be influenced by a series of economic data releases this week. Market participants are particularly focused on the Job Openings and Labor Turnover Survey (JOLTS) and the Nonfarm Payrolls (NFP) data, as these will provide insights into job demand in the economy.
Plus, Q3 GDP data will help gauge the current health of the US economy, further influencing the dollar's value as traders seek cues for future market movements.
Therefore, the US Dollar's mild bearish trend and upcoming economic data releases may create volatility in the EUR/USD pair. If US data shows strong job demand or GDP growth, it could strengthen the dollar, potentially leading to a decline in the Euro's value.
EUR/USD – Technical Analysis
EUR/USD is experiencing bearish momentum, with the currency pair trading below its 50-day Exponential Moving Average (EMA) of $1.08085. The pivot level for today is at $1.07964, just above the current price. This positioning suggests that the pair is under selling pressure, with immediate resistance located at $1.08152, followed by stronger resistance at $1.08388 and $1.08655.
The Relative Strength Index (RSI) currently stands at 34, reflecting bearish momentum and indicating that the pair may still have room to the downside before reaching oversold conditions. A sustained move below the pivot and the 50 EMA could expose EUR/USD to immediate support at $1.07615, with additional downside targets at $1.07139 if selling pressure intensifies.
For traders considering short positions, an entry below $1.07957 could present a favorable opportunity, with a target set at $1.07613. A stop-loss placed slightly above the immediate resistance level at $1.08148 would help limit risk, ensuring a balanced risk-to-reward setup.
Overall, as the EUR/USD pair trades below its pivot and the 50 EMA, the outlook remains bearish. Market participants should monitor the pair’s reaction to the support at $1.07615 closely, as a break could accelerate further downside movement.
Conclusion: EUR/USD’s current positioning below the pivot and 50 EMA signals continued bearishness. Traders may consider short entries below $1.07957, targeting $1.07613, with a protective stop-loss near $1.08148.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD faces key resistance at $1.08692, with a breakout needed for a bullish shift.
- Breaching $1.08291 could pave the way for a move down to $1.07712.
- RSI at 59 shows moderate bullish momentum, but resistance caps further gains.
EUR/USD is trading at $1.08213, down by 0.06% as the currency pair struggles to maintain momentum near the $1.08465 pivot point. Immediate support stands at $1.08291, a level crucial for short-term sentiment. Should EUR/USD breach this level, it could extend the bearish move toward the immediate support target of $1.07712, with a further downside likely to test $1.07486 if selling pressure intensifies.
On the upside, EUR/USD will face strong resistance at $1.08692, a level reinforced by the 50-day EMA, which is currently sitting at $1.08092. This EMA acts as a significant pivot, potentially limiting any bullish moves unless there is a sustained break above it. Additional resistance can be found at $1.08880, providing a key barrier for bullish sentiment should the pair reverse.
The RSI reading of 59 signals modestly bullish momentum, suggesting the pair may be on the verge of testing higher resistance levels. However, the bearish pressure currently weighs heavier as the price action remains below the pivotal $1.08465 level. Traders may want to consider a short position below $1.08288, with a take-profit target of $1.07976 and a stop-loss at $1.08465.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08288
Take Profit – 1.07976
Stop Loss – 1.08465
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$312/ -$177
Profit & Loss Per Mini Lot = +$31/ -$17
EUR/USD Price Analysis – Oct 25, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair is steady around 1.0830, continuing its recovery from Thursday. This rise is mainly due to a drop in the US Dollar. However, the Euro's gains may not last as the latest preliminary PMI report shows that economic activity in the Eurozone is still struggling, with the flash Composite PMI falling to 49.7 in October.
Meanwhile, the manufacturing sector has been contracting for 28 months, remaining below the key 50 mark. Although the service sector saw some growth, it was slower than expected. This ongoing decline in business activity raises concerns about the Eurozone's economic growth, leaving many unsure about the future.
Eurozone Economic Decline and ECB Rate Cut Speculation Weigh on Euro, Impacting EUR/USD Pair
As we mentioned, the gains in the shared currency might be short-lived as the latest PMI report indicates that the Eurozone's economic activity continues to decline. The flash Composite PMI dropped to 49.7 in October, showing that the manufacturing sector has been shrinking for 28 months, remaining below the crucial 50 mark that signals growth.
Although the service sector saw some unexpected growth, it was slower than hoped. This ongoing decline in business activity raises concerns about the Eurozone's economic future. Furthermore, there is increasing speculation that the European Central Bank (ECB) may implement a larger-than-usual interest rate cut in its December meeting, which could further weigh down the Euro.
This year, the ECB has already lowered its Deposit Facility Rate three times by 25 basis points, bringing it to 3.25%. Market expectations are now leaning towards a potential 50 basis point cut in December, fueled by comments from some ECB policymakers who expressed concerns about inflation staying below the bank's 2% target.
Mario Centeno, the Governor of the Bank of Portugal and an ECB policymaker noted that a 50 basis point cut is a possibility and warned of growing risks to economic growth.
Meanwhile, data released on Friday showed that the German IFO Business Climate, Current Assessment, and Expectations for October were better than expected. However, improving sentiment may not lead to a significant economic revival due to overall weak business activity.
Therefore, the ongoing decline in Eurozone economic activity and speculation of a larger interest rate cut by the ECB could weaken the Euro, putting downward pressure on the EUR/USD pair. This uncertainty may lead to increased volatility and potential losses for Euro traders.
US Dollar Recovery Supported by Fed Expectations and Economic Data, Impacting EUR/USD Pair
On the US front, the broad-based US Dollar is seeing a recovery, supported by several factors, including growing expectations that the Federal Reserve (Fed) will take a gradual approach to cutting interest rates and increasing hopes that former President Donald Trump could win the upcoming presidential election against Vice President Kamala Harris.
Investor confidence in the Fed's cautious policy is bolstered by positive economic data, including strong Nonfarm Payrolls (NFP) and Retail Sales figures for September, as well as better-than-expected flash S&P Global PMI data for October, indicating sustainable economic growth.
Moving ahead, attention will turn to the US Durable Goods Orders data for September, set to be released at 12:30 GMT, which is expected to show a decline of 1% after remaining unchanged in August.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.08213, down by 0.06% as the currency pair struggles to maintain momentum near the $1.08465 pivot point. Immediate support stands at $1.08291, a level crucial for short-term sentiment.
Should EUR/USD breach this level, it could extend the bearish move toward the immediate support target of $1.07712, with a further downside likely to test $1.07486 if selling pressure intensifies.
On the upside, EUR/USD will face strong resistance at $1.08692, a level reinforced by the 50-day EMA, which is currently sitting at $1.08092. This EMA acts as a significant pivot, potentially limiting any bullish moves unless there is a sustained break above it.
Additional resistance can be found at $1.08880, providing a key barrier for bullish sentiment should the pair reverse.
The RSI reading of 59 signals modestly bullish momentum, suggesting the pair may be on the verge of testing higher resistance levels. However, the bearish pressure currently weighs heavier as the price action remains below the pivotal $1.08465 level.
Traders may want to consider a short position below $1.08288, with a take-profit target of $1.07976 and a stop-loss at $1.08465.
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EUR/USD Price Analysis – Oct 23, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair failed to stop its downward trend and remains under pressure due to a faster-than-expected decline in inflation and increasing concerns over a potential downturn in the Eurozone economy, leading to speculation about further interest rate cuts by the European Central Bank (ECB).
Concurrently, the US dollar has strengthened, driven by various factors, including political uncertainty ahead of the upcoming US presidential election and expectations that the Federal Reserve’s (Fed) policy-easing cycle will proceed more gradually than anticipated. Investors will be particularly focused on the Fed’s Beige Book, set to be released on Wednesday at 18:00 GMT, along with speeches from several Fed and ECB members, including President Lagarde.
EUR Under Pressure as Inflation Declines and ECB Rate Cut Speculation Grows
On the EUR front, the outlook for the Euro (EUR) has worsened due to a faster-than-expected decline in inflation and rising concerns about a potential downturn in the Eurozone economy. This situation has sparked speculation about more interest rate cuts by the European Central Bank (ECB), which has already lowered its Deposit Facility Rate three times this year. Many traders expect another cut in December, prompting discussions about what level of borrowing rates would effectively control inflation while also encouraging economic growth.
Recently, some ECB officials have debated whether to lower interest rates below the so-called neutral rate, which is estimated to be around 2% to 2.25%. Lithuanian central bank governor Gediminas Šimkus highlighted concerns about inflation potentially staying too low, suggesting that if disinflation continues, rates may drop below natural levels.
Meanwhile, ECB President Christine Lagarde expressed confidence that inflation would return to the bank’s target of 2% by 2025, earlier than expected. She noted that while the direction of monetary policy is clear, the pace of future interest rate cuts will depend on incoming economic data.
Therefore, the worsening outlook for the Euro and expectations of further ECB rate cuts are likely to keep the EUR/USD pair under pressure. A weaker Euro combined with a stronger US dollar could lead to continued declines in the EUR/USD exchange rate.
US Dollar Strength Pressures EUR/USD Amid Political Uncertainty and Fed Expectations
On the US front, the broad-based US dollar (USD) is gaining strength, pushing the EUR/USD pair down to near 1.0780 level. However, this strength in the dollar is fueled by political uncertainty ahead of the upcoming US presidential election and expectations that the Federal Reserve (Fed) will adopt a more gradual approach to any policy easing than previously thought.
Market sentiment has shifted due to increasing bets that former President Donald Trump could win the election, scheduled in less than two weeks. While recent polls show Vice President Kamala Harris with a slight lead, a Trump victory could lead to higher tariffs and lower taxes, potentially pushing the Fed to adopt a more restrictive policy stance.
Currently, markets anticipate two 25 basis point interest rate cuts from the Fed in November and December. However, analysts suggest that the Fed is unlikely to implement another large rate cut like the one in September, especially since recent Nonfarm Payrolls (NFP) data indicates that labor demand remains strong. Investors are closely watching the Fed’s Beige Book release at 18:00 GMT, along with speeches from Fed and ECB officials, including President Lagarde.
Therefore, the strengthening US dollar, driven by political uncertainty and expectations of gradual Fed policy easing, is likely to continue putting downward pressure on the EUR/USD pair.
EUR/USD – Technical Analysis
From a technical perspective, EUR/USD is trading just below its pivot point of $1.08117, signaling indecision in the market and the potential for a breakout in either direction.
Immediate resistance is found at $1.08309, followed by $1.08475, and a stronger level at $1.08698. A breach of these resistance levels may trigger a broader upward move, but current momentum remains subdued.
On the downside, immediate support sits at $1.07920, with additional levels at $1.07712 and $1.07486. A break below $1.07920 would likely signal renewed selling pressure, pushing the pair toward these lower support levels.
The Relative Strength Index (RSI) is at 36, indicating mild bearish momentum, as EUR/USD remains in a consolidative phase. The 50-day Exponential Moving Average (EMA), currently at $1.08344, suggests that prices are trading below a critical threshold, reinforcing the short-term bearish outlook.
For traders, a short position could be considered if EUR/USD drops below $1.08179, with a target at $1.07716 and a stop-loss at $1.08478 to manage upside risks.
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