The ECB meets on Thursday. The pair was last at 1.0564 levels, note OCBC FX analysts Frances Cheung and Christopher Wong.
Germany comes into focus this week
“Markets have already reduced expectations of a 50 bp cut and are now pricing in just a 25 bp cut. But politics may steal the spotlight from the ECB. Germany will come into focus this week. Chancellor Scholz is expected to call a vote of confidence on December 11 (Wednesday) and the Bundestag will vote next Monday, December 16. To survive the vote, Scholz would need to receive the support of a majority. absolute 367 votes.”
“But in the event that it fails, then Germany is likely to head for elections on February 23, 2025. Political risks in Europe may continue to weigh on the EUR, but we had also noted that many negative factors for the EUR, such as “Slowing growth momentum, political repercussions, ECB cut expectations, etc., are already in the price. We still do not rule out the risk of a short-term EUR short squeeze.”
“The daily momentum is slightly bullish but the RSI rise has slowed down. The price pattern shows a classic formation of an inverted head and shoulders pattern, which is typically associated with a bullish reversal. The neckline sits at 1.0610/20. Breakout puts 1.0670 (38.2% fibo) within reach before next resistance is at 1.0750/75 (50) levels. DMA, 50% fibo). Support at 1.0540/50 levels (23.6% fibo, 21 DMA), 1.0460 levels.”
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.
