EUR/USD Price Analysis – Oct 09, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continues its bearish trend, hovering around 1.0960 as the US Dollar strengthens ahead of the release of the FOMC Minutes. Meanwhile, the Euro (EUR) remains under selling pressure as traders have factored in expectations of further rate cuts by the European Central Bank (ECB).
The ECB is anticipated to lower its Deposit Facility Rate by 50 basis points to 3% by year-end, implying two 25 basis point cuts in the upcoming policy meetings scheduled for next week and December.
Euro Under Pressure as ECB Signals More Rate Cuts
On the EUR front, the Euro is under pressure as traders expect more rate cuts from the European Central Bank (ECB). The ECB is anticipated to lower its Deposit Facility Rate by 50 basis points (bps) to 3% by the end of this year, with two 25 bps cuts planned for the upcoming policy meetings in November and December.
This comes after the ECB already cut borrowing rates by 50 bps earlier this year, as officials believe inflation will return to the target of 2% by 2025. The declining trend in price pressures and weak economic growth in the Eurozone have fueled these expectations.
ECB policymaker and Governor of the Greek Central Bank, Yannis Stournaras, also supports two more rate cuts this year and suggests further reductions in 2025 as inflation continues to ease. In a recent interview with the Financial Times, he mentioned that inflation is slowing down faster than the ECB had predicted in September, reinforcing the case for additional rate cuts. This has increased market expectations for continued monetary easing as the Eurozone economy remains vulnerable.
Therefore, the anticipated rate cuts by the ECB are likely to weaken the Euro against the US Dollar, leading to continued bearish pressure on the EUR/USD pair. As traders react to these expectations, the Euro may struggle to regain strength.
US Dollar Strengthening Puts Pressure on EUR/USD Pair
On the US front, the broad-based US Dollar (USD) continues to strengthen, putting pressure on the EUR/USD pair. The US Dollar Index (DXY) has climbed to a seven-week high of 102.70 as traders adjust their expectations regarding future interest rate cuts from the Federal Reserve (Fed).
Following a strong Nonfarm Payrolls (NFP) report for September, concerns about economic growth and consumer spending have eased, leading many traders to unwind their earlier bets on significant rate cuts. Moreover, heightened tensions in the Middle East have increased the appeal of the USD as a safe haven asset.
Looking ahead, financial market participants expect the Fed to implement a smaller rate cut of 25 basis points in the remaining two policy meetings this year. Investors will be closely watching the Federal Open Market Committee (FOMC) Minutes from September, scheduled for release on Wednesday at 18:00 GMT.
The strengthening US Dollar, driven by positive economic data and shifting rate expectations, is likely to maintain downward pressure on the EUR/USD pair. As traders adjust their positions, the Euro may struggle to recover against the robust Greenback.
EUR/USD - Technical Analysis
The Euro (EUR/USD) is currently trading at $1.09616, down 0.17% for the day, as bearish momentum dominates. The pair is moving below the key pivot point of $1.09529 on the 4-hour chart, signaling continued downward pressure. Immediate resistance is situated at $1.09991, followed by $1.10163 and $1.10362, suggesting that buyers will need to push the pair above these levels to regain control.
On the downside, immediate support lies at $1.09400, with additional supports at $1.09275 and $1.09141. A break below $1.09400 could lead to further declines, targeting these lower levels. The 50-day Exponential Moving Average (EMA) at $1.09906 is currently acting as a critical resistance level, reflecting a bearish bias as long as prices remain beneath it.
The Relative Strength Index (RSI) stands at 39, indicating a nearing oversold condition that could trigger a potential consolidation or short-term rebound if support holds.
Traders may consider a buying opportunity if EUR/USD breaks above $1.09527, targeting a move to $1.09924, with a stop-loss set below $1.09278 to manage risk. On the other hand, failure to hold above $1.09529 could signal a deeper correction toward the next support at $1.09275.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Momentum: EUR/USD remains below the $1.09529 pivot point, indicating sustained bearish pressure.
- Immediate Support Levels: Key support lies at $1.09400; a break could push prices lower toward $1.09275 and $1.09141.
- RSI at 39: RSI indicates a nearing oversold condition, which could support a potential short-term recovery if $1.09400 holds.
The Euro (EUR/USD) is currently trading at $1.09616, down 0.17% for the day, as bearish momentum dominates. The pair is moving below the key pivot point of $1.09529 on the 4-hour chart, signaling continued downward pressure. Immediate resistance is situated at $1.09991, followed by $1.10163 and $1.10362, suggesting that buyers will need to push the pair above these levels to regain control.
On the downside, immediate support lies at $1.09400, with additional supports at $1.09275 and $1.09141. A break below $1.09400 could lead to further declines, targeting these lower levels. The 50-day Exponential Moving Average (EMA) at $1.09906 is currently acting as a critical resistance level, reflecting a bearish bias as long as prices remain beneath it.
The Relative Strength Index (RSI) stands at 39, indicating a nearing oversold condition that could trigger a potential consolidation or short-term rebound if support holds.
Traders may consider a buying opportunity if EUR/USD breaks above $1.09527, targeting a move to $1.09924, with a stop-loss set below $1.09278 to manage risk. On the other hand, failure to hold above $1.09529 could signal a deeper correction toward the next support at $1.09275.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.09527
Take Profit – 1.09924
Stop Loss – 1.09278
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$397/ -$249
Profit & Loss Per Mini Lot = +$39/ -$24
EUR/USD Price Analysis – Oct 07, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair continued its downward trend, remaining under pressure around the 1.0968 level and hitting an intra-day low of 1.0955. This decline can be attributed to a bullish US dollar, which is holding gains near a fresh seven-week high, driven by unexpectedly strong labor market data from the United States for September.
Moreover, the uncertainty surrounding the euro's outlook has further weighed on the pair. Speculation is growing that the European Central Bank (ECB) may consider cutting interest rates again during its monetary policy meeting on October 17. Investors are keenly awaiting the US Consumer Price Index (CPI) data for September, set to be released on Thursday, for more insight into the interest rate outlook.
Strong US Dollar and Labor Data Weigh on EUR/USD Outlook
On the US front, the broad-based US dollar (USD) remains strong, holding onto gains near a fresh seven-week high, thanks to unexpectedly positive labor market data released on Friday. The employment report indicated robust labor demand and solid wage growth, revealing that the economy added 254,000 non-farm jobs in September—significantly higher than the expected 140,000.
Additionally, the unemployment rate fell to 4.1%, down from the anticipated rate and August’s figure of 4.2%. This upbeat employment data has led traders to revise their expectations regarding interest rate cuts from the Federal Reserve (Fed). After a larger-than-usual cut of 50 basis points in September, market bets for another cut in November have diminished.
Moreover, concerns about persistent inflation grew after the release of the hotter-than-expected Average Hourly Earnings for September, which rose to 4.0% year-over-year, surpassing expectations. Month-on-month wage growth also increased by 0.4%, further reducing speculation about significant rate cuts by the Fed.
Therefore, the strong US dollar and positive labor data have put downward pressure on the EUR/USD pair, as traders reassess interest rate cut expectations from the Federal Reserve. This dynamic strengthens the dollar against the euro, leading to further declines in the currency pair.
EUR/USD Faces Downward Pressure Amid Strong US Dollar and ECB Rate Cut Speculation
Conversely, the growing uncertainty regarding the euro's outlook and increasing speculation that the European Central Bank (ECB) may cut interest rates again during its monetary policy meeting on October 17 have emerged as significant factors keeping the EUR/USD pair under pressure. Large bets on a dovish ECB are fueled by concerns that inflation in the Eurozone may stabilize below the bank's 2% target. According to flash estimates, the annual Eurozone Harmonized Index of Consumer Prices (HICP) slowed to 1.8% in September, falling short of expectations.
However, the economic outlook for Germany, the largest economy in the Eurozone, also appears weak due to soft demand. Reports indicate that the German economy is expected to shrink by 0.2% this year, as stated by the ministry led by Robert Habeck of the Green Party. In the meantime, ECB policymaker and French Central Bank Chief François Villeroy de Galhau highlighted the need for another interest rate cut in an interview over the weekend.
He cautioned about the risk of undershooting the inflation target due to weak growth and prolonged restrictive monetary policy. Meanwhile, Eurozone Retail Sales grew by 0.8% annually in August but fell short of the expected 1% increase.
Therefore, the combination of a strong US dollar and uncertainty over the Eurozone's economic outlook has increased downward pressure on the EUR/USD pair. Speculation of further ECB interest rate cuts may continue to weaken the euro, leading to potential declines in the currency pair.
EUR/USD - Technical Analysis
The EUR/USD pair is displaying subdued price action, lingering near the 1.0966 mark. The Euro's slight dip against the Dollar reflects an overall lack of momentum, with the pair trading below its 50-day Exponential Moving Average (EMA) at 1.1036.
Currently, the Relative Strength Index (RSI) stands at 29, suggesting that the pair is in oversold territory and might be ripe for a corrective bounce. However, any upside movement faces immediate resistance at 1.0999, followed by stronger barriers at 1.1016 and 1.1036.
The technical outlook remains bearish as long as EUR/USD stays below the pivot point of 1.0983. A break below the immediate support level at 1.0951 could pave the way for further declines toward 1.0938 and potentially 1.0923.
This bearish sentiment is reinforced by the continued strength of the U.S. dollar amid expectations that the Federal Reserve may delay any further rate cuts due to strong U.S. economic data.
In conclusion, the EUR/USD is likely to remain under pressure unless it can break and sustain above the 1.0983 pivot point. Traders should monitor upcoming U.S. inflation data closely, as it could significantly impact the pair’s direction.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Momentum: EUR/USD is trading below its 50-day EMA, indicating bearish pressure.
- Oversold RSI: The RSI is at 29, suggesting potential for a short-term corrective rebound.
- Key Levels to Watch: Support at 1.0951; resistance at 1.0999, with pivot at 1.0983.
The EUR/USD pair is displaying subdued price action, lingering near the 1.0966 mark. The Euro's slight dip against the Dollar reflects an overall lack of momentum, with the pair trading below its 50-day Exponential Moving Average (EMA) at 1.1036.
Currently, the Relative Strength Index (RSI) stands at 29, suggesting that the pair is in oversold territory and might be ripe for a corrective bounce. However, any upside movement faces immediate resistance at 1.0999, followed by stronger barriers at 1.1016 and 1.1036.
The technical outlook remains bearish as long as EUR/USD stays below the pivot point of 1.0983. A break below the immediate support level at 1.0951 could pave the way for further declines toward 1.0938 and potentially 1.0923.
This bearish sentiment is reinforced by the continued strength of the U.S. dollar amid expectations that the Federal Reserve may delay any further rate cuts due to strong U.S. economic data.
In conclusion, the EUR/USD is likely to remain under pressure unless it can break and sustain above the 1.0983 pivot point. Traders should monitor upcoming U.S. inflation data closely, as it could significantly impact the pair’s direction.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.09833
Take Profit – 1.09518
Stop Loss – 1.09996
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$315/ -$163
Profit & Loss Per Mini Lot = +$31/ -$16
EUR/USD Price Analysis – Oct 04, 2024
Daily Price Outlook
During Friday's European session, the EUR/USD currency pair continued its downward trend, turning bearish as it faced selling pressure around the 1.1030 mark, reaching an intraday low of 1.1020. The pair has edged lower, with the US Dollar (USD) maintaining its strength ahead of the upcoming Nonfarm Payrolls (NFP) report for September, scheduled for release at 12:30 GMT.
Investors are closely monitoring the NFP report, as it is expected to significantly influence the pace of the Federal Reserve's policy adjustments for the remainder of the year. Economists project that US employers added 140,000 new jobs in September, a slight decrease from 142,000 in August. Meanwhile, the unemployment rate is anticipated to remain stable at 4.2%.
Strong US Dollar and Inflation Concerns Weigh on EUR/USD Pair
On the US front, the US Dollar (USD) remains strong as traders await the Nonfarm Payrolls (NFP) report for September, set to be released at 12:30 GMT. The US Dollar Index (DXY), which measures the value of the dollar against six major currencies, is holding steady around 102.00 after a successful four-day streak. Traders have started to adjust their expectations for interest rate cuts by the Federal Reserve in November.
Recent data indicates that the likelihood of a 50 basis point rate cut has dropped from 53% to 33% in just a week. This shift comes after positive reports on employment from the ADP Employment Change and JOLTS Job Openings for August.
Moreover, concerns about persistent inflation are causing traders to reduce their bets on significant rate cuts by the Fed. The ISM Services PMI report for September revealed that input costs, measured by the Prices Paid component, unexpectedly rose to 59.4, indicating increasing inflationary pressures.
The overall Services PMI, which reflects activities in the service sector that makes up two-thirds of the economy, grew robustly to 54.9, surpassing estimates of 51.7 and the previous month’s figure of 51.5. These developments suggest that inflation may remain a key concern for the Fed moving forward.
This news has put additional pressure on the EUR/USD pair, as the strong US Dollar and reduced expectations for Fed rate cuts, combined with persistent inflation concerns, weigh on the euro, pushing the pair lower in the short term.
Euro Faces Pressure Amid Middle East Tensions and ECB Rate Cut Speculation
On the EUR front, the euro is under pressure due to worsening market sentiment, largely driven by escalating conflict in the Middle East. However, the tensions between Iran and Israel intensified after the killing of Hezbollah leader Hassan Nasrallah, which led to Tehran retaliating with ballistic missile attacks on military bases in Tel Aviv. This growing instability is weighing on risk-sensitive assets like the euro, adding to its recent decline.
At the same time, speculation about the European Central Bank (ECB) cutting interest rates at its upcoming meeting on October 17 is pushing the euro further down. In the meantime, the concerns about slower economic growth in the Eurozone and a drop in inflation, with the Harmonized Index of Consumer Prices (HICP) falling below the ECB's 2% target in September, are fueling these rate cut expectations.
ECB board member Isabel Schnabel, who has typically supported higher rates, acknowledged risks to economic growth in a recent speech. However, she remains optimistic that inflation will continue to drop toward the ECB's target, supported by weakening labor demand and progress in reducing price pressures.
This news is likely to exert downward pressure on the EUR/USD pair, as escalating geopolitical tensions and increasing speculation of ECB rate cuts contribute to a negative outlook for the euro, making the currency less attractive to investors.
EUR/USD - Technical Analysis
The EUR/USD pair is currently trading at $1.10275, a slight dip of 0.02%, as the euro struggles to find direction amid a stronger US dollar. The pair is hovering just below its pivot point of $1.1039, signaling potential weakness ahead. Immediate resistance is seen at $1.1055, followed by $1.1066 and $1.1083. A break above these levels could trigger a bullish recovery, but the broader trend remains cautious as the 50-day Exponential Moving Average (EMA) at $1.1082 continues to cap upside momentum.
On the downside, immediate support is noted at $1.1017, followed by $1.1002 and $1.0984. A breach below $1.1017 could accelerate selling pressure, with the next target at $1.1002. The RSI stands at 38, suggesting a bearish bias, though not yet in oversold territory, indicating the pair still has room for further declines.
Traders might consider a sell entry below $1.10387, targeting $1.10072, with a stop-loss placed at $1.10550. This setup aligns with the ongoing bearish momentum, as the pair remains below key moving averages and continues to test lower support levels. A sustained move below $1.1017 would confirm further downside potential, possibly pushing the pair toward $1.0984.
In the near term, the outlook for EUR/USD is tilted to the downside unless we see a significant break above $1.1055, which could negate the bearish scenario and attract new buyers.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Sentiment: EUR/USD is trading below its pivot point at $1.1039, indicating potential weakness.
- Key Support Levels: Immediate support at $1.1017; a break below this could push the pair toward $1.1002.
- Resistance Barriers: Overhead resistance stands at $1.1055, limiting bullish attempts.
The EUR/USD pair is currently trading at $1.10275, a slight dip of 0.02%, as the euro struggles to find direction amid a stronger US dollar. The pair is hovering just below its pivot point of $1.1039, signaling potential weakness ahead. Immediate resistance is seen at $1.1055, followed by $1.1066 and $1.1083. A break above these levels could trigger a bullish recovery, but the broader trend remains cautious as the 50-day Exponential Moving Average (EMA) at $1.1082 continues to cap upside momentum.
On the downside, immediate support is noted at $1.1017, followed by $1.1002 and $1.0984. A breach below $1.1017 could accelerate selling pressure, with the next target at $1.1002. The RSI stands at 38, suggesting a bearish bias, though not yet in oversold territory, indicating the pair still has room for further declines.
Traders might consider a sell entry below $1.10387, targeting $1.10072, with a stop-loss placed at $1.10550. This setup aligns with the ongoing bearish momentum, as the pair remains below key moving averages and continues to test lower support levels. A sustained move below $1.1017 would confirm further downside potential, possibly pushing the pair toward $1.0984.
In the near term, the outlook for EUR/USD is tilted to the downside unless we see a significant break above $1.1055, which could negate the bearish scenario and attract new buyers.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.10387
Take Profit – 1.10072
Stop Loss – 1.10550
Risk to Reward – 1: 1.9
Profit & Loss Per Standard Lot = +$315/ -$163
Profit & Loss Per Mini Lot = +$31/ -$16
EUR/USD Price Analysis – Oct 02, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair is trading slightly lower in the 1.1070s on Wednesday, following a sharp decline from 1.1135 on Tuesday. This downturn can be largely attributed to disappointing inflation data from the Eurozone. The Harmonized Index of Consumer Prices (HICP) reported a year-over-year increase of only 1.8% in September, a drop from 2.2% previously and below expectations of 1.9%.
Meanwhile, core inflation fell to 2.7%, slightly down from August’s 2.8%. These figures suggest that inflation is now trailing the European Central Bank's (ECB) target of 2.0%, raising concerns about the economic outlook. Consequently, the likelihood of further interest rate cuts by the ECB has increased, which could lead to capital outflows and exert additional pressure on the euro.
Impact of Eurozone Economic Data on EUR/USD Pair
As we mentioned, the previously released Eurozone unemployment rate has had a minimal impact on the pair, remaining steady at 6.4% in August, unchanged from July and in line with economists' expectations. However, the recent inflation figures have heightened concerns regarding the economic outlook in the region, suggesting that further ECB rate cuts could weaken the euro.
Moreover, the EUR/USD pair has faced additional downward pressure due to the strengthening US dollar, which rebounded sharply on Tuesday following positive job data. The JOLTS Job Openings report revealed an unexpected increase in job openings to 8.04 million in August, significantly above the revised figure of 7.71 million in July and exceeding expectations of 7.66 million.
This robust labor market data offsets weaker manufacturing activity in the US, as indicated by the ISM Manufacturing PMI, which remained in contraction territory for September.
Therefore, the steady Eurozone unemployment rate has done little to support the euro amid rising inflation concerns, while strengthening US labor market data, particularly the surge in job openings, has boosted the dollar, increasing downward pressure on the EUR/USD pair.
Geopolitical Tensions and Economic Indicators Weigh on EUR/USD Outlook
The recent sell-off in the EUR/USD pair has intensified, driven largely by escalating geopolitical tensions in the Middle East. Iran's recent missile strikes on Israel have prompted a surge in safe-haven investments, pushing traders toward the US dollar and putting further downward pressure on the EURUSD pair.
As we look ahead, traders will be keeping a keen eye on the US ADP Employment Change data for September, along with statements from Federal Reserve officials, for further clues about market direction. Additionally, the ongoing situation in the Middle East and its repercussions on global markets will play a crucial role in shaping future movements of the EUR/USD pair.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.10651, down 0.02% in today’s session. The pair has struggled to gain traction, reflecting the broader uncertainty in global currency markets. After testing the $1.10832 resistance level earlier today, EUR/USD failed to break higher, suggesting that bearish momentum is still intact. The 50-day Exponential Moving Average (EMA) at $1.11405 continues to act as a strong resistance, capping further upside potential.
The Relative Strength Index (RSI) has dipped to 32, indicating bearish momentum and suggesting that EUR/USD could face additional downward pressure if it drops below 30. On the downside, immediate support is seen at $1.10461. A break below this level could accelerate declines toward $1.10254 and $1.10051. Conversely, for a bullish reversal to take hold, the pair must decisively break above the pivot point at $1.10695 and test the resistance levels at $1.10832 and $1.10952.
Short-term technical indicators suggest that EUR/USD may experience further declines if it fails to regain ground above $1.10695. The pair remains under selling pressure, with an entry below $1.10694 offering potential profit at $1.10453. Traders should watch for a move above $1.10832 to signal a potential bullish reversal.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Immediate Resistance: $1.10832 – A break above could lead to testing the next resistance at $1.10952.
- Immediate Support: $1.10461 – Failure to hold this level could result in a decline to $1.10254 and $1.10051.
- Pivot Point: $1.10695 – Currently acting as a short-term neutral level.
EUR/USD is currently trading at $1.10651, down 0.02% in today’s session. The pair has struggled to gain traction, reflecting the broader uncertainty in global currency markets. After testing the $1.10832 resistance level earlier today, EUR/USD failed to break higher, suggesting that bearish momentum is still intact. The 50-day Exponential Moving Average (EMA) at $1.11405 continues to act as a strong resistance, capping further upside potential.
The Relative Strength Index (RSI) has dipped to 32, indicating bearish momentum and suggesting that EUR/USD could face additional downward pressure if it drops below 30. On the downside, immediate support is seen at $1.10461. A break below this level could accelerate declines toward $1.10254 and $1.10051. Conversely, for a bullish reversal to take hold, the pair must decisively break above the pivot point at $1.10695 and test the resistance levels at $1.10832 and $1.10952.
Short-term technical indicators suggest that EUR/USD may experience further declines if it fails to regain ground above $1.10695. The pair remains under selling pressure, with an entry below $1.10694 offering potential profit at $1.10453. Traders should watch for a move above $1.10832 to signal a potential bullish reversal.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.10694
Take Profit – 1.10453
Stop Loss – 1.10838
Risk to Reward – 1: 1.6
Profit & Loss Per Standard Lot = +$241/ -$144
Profit & Loss Per Mini Lot = +$24/ -$14
EUR/USD Price Analysis – Sep 30, 2024
Daily Price Outlook
Despite the downbeat flash annual Consumer Price Index (CPI) data from six German states showing a continued slowdown in inflation, the EUR/USD currency pair is maintaining its upward momentum, climbing to around 1.1193 and even reaching an intra-day high of 1.1208.
This rise can be largely attributed to a weakening US dollar, which is losing strength as traders look ahead to Federal Reserve Chair Jerome Powell's upcoming speech at 17:00 GMT.
Easing Inflation in the Eurozone Sparks Rate Cut Speculation Ahead of ECB Meeting
On the EUR side, recent data indicates that six German states experienced a further slowdown in inflation for September, as the flash annual Consumer Price Index (CPI) showed a decline in price growth.
Although month-on-month inflation increased at a quicker pace than in August, it still fell within the modest 0.2% range.
Moreover, data released on Friday from France and Spain revealed that price pressures also rose at a slower-than-expected rate, strengthening the belief that inflation is easing across the Eurozone.
This trend could be a positive sign for consumers and the broader economy as it suggests that price stability is gradually returning.
This slowdown in inflation has sparked rising expectations that the European Central Bank (ECB) may cut interest rates in its upcoming meeting on October 17.
Market participants have ramped up their bets, now pricing in a roughly 75% chance of a rate cut, a significant increase from just 25% a week ago.
It's worth noting that the ECB had already lowered its Deposit Facility Rate by 25 basis points to 3.5% during its policy meeting on September 12.
These developments suggest that the central bank is closely monitoring economic conditions and may take further action to support growth.
Moving ahead, investors are anticipating the release of the preliminary Harmonized Index of Consumer Prices (HICP) data for Germany and the Eurozone later this week. Furthermore, ECB President Christine Lagarde's speech scheduled for 13:00 GMT today is expected to shed light on the potential interest rate cut trajectory for the rest of the year.
US Dollar Pressure and Potential Rate Cuts: Impact on EUR/USD Pair
On the US front, the broad-based US dollar is facing downward pressure as investors await Federal Reserve Chair Jerome Powell's speech scheduled for 17:00 GMT. Many are hoping for clues about possible interest rate cuts at the Fed's upcoming November meeting.
According to the CME FedWatch tool, there's currently a 41.6% chance of the Fed reducing interest rates by 50 basis points to a range of 4.25% to 4.50%.
However, this probability has slipped from about 53.0% last Friday, following the release of the August Personal Consumption Expenditures Price Index (PCE) report. On the data front, the latest PCE report revealed that annual inflation unexpectedly fell to 2.2%, down from July’s 2.5%.
This marks the lowest inflation reading since February 2021. However, core PCE inflation, which excludes volatile food and energy prices, rose to 2.7%, raising concerns about the need for cautious rate cuts moving forward.
Recently, Fed policymakers have shifted their focus toward preventing job losses and economic slowdowns, expressing confidence that inflation will eventually return to the 2% target.
As a result, investors are closely monitoring upcoming economic indicators, including the JOLTS Job Openings for August and the ADP Employment Change and Nonfarm Payrolls (NFP) figures for September, as these will provide valuable insights into the health of the labor market.
Therefore, the easing inflation in the US, alongside cautious Fed signals, may strengthen the EUR/USD pair as the probability of rate cuts increases, attracting investors seeking higher yields in the Eurozone.
EUR/USD - Technical Analysis
EUR/USD is currently trading at $1.11937, reflecting a modest gain of 0.03% as it hovers above the pivot point at $1.1184. The pair has been in a steady upward trajectory, suggesting mild bullish sentiment in the near term.
Immediate resistance is observed at $1.1200, followed by $1.1214 and $1.1232, making these levels critical for further upward momentum. A break above $1.1214 could lead to a test of $1.1232, indicating a stronger bullish continuation.
On the downside, immediate support lies at $1.1171, with subsequent levels at $1.1150 and $1.1133. The 50-day Exponential Moving Average (EMA) is positioned at $1.1166, indicating that the pair is trading above its short-term trend line and suggesting continued bullish momentum.
However, the Relative Strength Index (RSI) is at 61, nearing overbought territory, which could limit further gains unless there is a strong catalyst, such as positive economic data from the Eurozone or dovish commentary from the Federal Reserve.
From a technical perspective, traders may consider long positions above $1.1184, targeting resistance at $1.1214 and setting a stop-loss around $1.1169 to manage risk.
The focus will be on key economic releases, such as the Eurozone inflation data and U.S. employment numbers, which could significantly influence the pair’s direction in the coming days.
For now, the EUR/USD remains supported above $1.1184, but any break below this pivot point could shift sentiment to bearish, bringing $1.1150 back into play as a key support level. Until then, the pair looks poised to test resistance levels as it sustains its upward momentum.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Mild Bullish Bias: EUR/USD trades above its pivot at $1.1184, eyeing resistance at $1.1214.
- Support Levels: Immediate support at $1.1171; break below could test $1.1150.
- Buy Strategy: Consider buying above $1.1184, targeting $1.1214 with a stop-loss at $1.1169.
EUR/USD is currently trading at $1.11937, reflecting a modest gain of 0.03% as it hovers above the pivot point at $1.1184. The pair has been in a steady upward trajectory, suggesting mild bullish sentiment in the near term.
Immediate resistance is observed at $1.1200, followed by $1.1214 and $1.1232, making these levels critical for further upward momentum. A break above $1.1214 could lead to a test of $1.1232, indicating a stronger bullish continuation.
On the downside, immediate support lies at $1.1171, with subsequent levels at $1.1150 and $1.1133. The 50-day Exponential Moving Average (EMA) is positioned at $1.1166, indicating that the pair is trading above its short-term trend line and suggesting continued bullish momentum.
However, the Relative Strength Index (RSI) is at 61, nearing overbought territory, which could limit further gains unless there is a strong catalyst, such as positive economic data from the Eurozone or dovish commentary from the Federal Reserve.
From a technical perspective, traders may consider long positions above $1.1184, targeting resistance at $1.1214 and setting a stop-loss around $1.1169 to manage risk.
The focus will be on key economic releases, such as the Eurozone inflation data and U.S. employment numbers, which could significantly influence the pair’s direction in the coming days.
For now, the EUR/USD remains supported above $1.1184, but any break below this pivot point could shift sentiment to bearish, bringing $1.1150 back into play as a key support level. Until then, the pair looks poised to test resistance levels as it sustains its upward momentum.
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.11844
Take Profit – 1.12141
Stop Loss – 1.11696
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$301/ -$148
Profit & Loss Per Mini Lot = +$29/ -$14