- The EUR/USD loses 0.39%, weighed down by the ECB's comments and the anticipation of the FOMC meeting.
- The possible policy changes of the ECB cause the fall of the Euro in the currency market.
- The focus is on the Fed's decision; It is believed that recent inflation in the US and solid economic growth could mark the decision of Powell and company.
The pair EUR/USD extends its losses on Monday, with buyers struggling to keep the exchange rate above the 1.0800 figure amid a quiet trading session ahead of Wednesday's decision by the US Federal Open Market Committee (FOMC). ). Falling US Treasury yields are no excuse for dollar bulls to get a boost; Therefore, the pair is trading at 1.0809, with a decrease of 0.39%.
ECB officials open the door to rate cuts at the next meeting
Comments from European Central Bank (ECB) policymakers are taking their toll on the Euro (EUR), as Peter Kazimir noted: “The next move will be a cut, and it is within our reach,” he wrote in a post from your blog. Echoing his comments, Mario Centeno of the ECB added that he prefers to act as soon as possible and be more “gradual” in relaxing policy.
Meanwhile, Klas Knot added: “We now have a credible view that inflation will return to 2% in 2025. The only missing piece is the conviction that wage growth will adapt to that lower inflation.”
Apart from this, the spotlight falls on the decision of the US Federal Reserve (Fed) on Wednesday. It must be said that the Fed's preferred inflation indicator stood at 2.6% year-on-year last Friday, although the underlying figures fell from 3.2% to 2.9% year-on-year, which could open the door for the Fed to soften its policy. However, strong economic growth in the United States could deter Fed Chairman Jerome Powell and company from easing monetary conditions.
EUR/USD Price Analysis: Technical Outlook
With EUR/USD setting a new cycle low after breaking the January 23 low at 1.0821, bears have the 100-day moving average (DMA) at 1.0777 in sight. A break below 1.0800 could bring the latter into play. Once these support levels are broken, the next stop would be the December 8 low at 1.0724. On the other hand, if the bulls reclaim the 200-DMA at 1.0841, it could open the way towards 1.0900.
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.
