Geopolitical events are causing a temporary dislocation of the pricing action promoted by macroeconomic factors in the EUR/USD, says the FX analyst of Ing Francesco Pesole.
Many ECB speakers to listen
“Even before the very weak retail sales of the United States were published, the German ZEW had arrived quite strong, with the index of ‘expectations’ essentially back to the levels prior to the ‘day of liberation’. Although the condition of overcompra and overvaluation of the EUR/USD suggests additional corrections, the preference for buying in fall in pause until oil prices absorb geopolitical shock. “
“So, although the USD can effectively recover some short-term impulse, we do not believe that this is sufficient to take the EUR/USD in a sustainable way back to the area of ​​1.12-1.13. Our short-term goal remains 1.14 for the pair.”
“Today, the Eurozone data calendar is light, but there are many ECB’s speakers. Given the sensitivity of ECB inflation projections to oil prices oscillations, we can probably expect even more caution by the Governing Council in the light of recent events. Markets will probably feel little pressure to anticipate a rate cut before December for now.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
