- EUR/USD recovers slightly as its outlook remains uncertain as the ECB is expected to extend its policy easing cycle.
- A victory for Donald Trump in the US presidential elections would significantly impact the Eurozone economy.
- Investors expect the Fed to follow the path of gradual rate cuts.
EUR/USD recovers slightly on Friday after hitting a new 10-week low near 1.0800 on Thursday. The outlook for the major currency pair remains bearish as the Euro (EUR) could face selling pressure amid expectations that further interest rate cuts from the European Central Bank (ECB) are on the way.
The ECB reduced its Deposit Facility Rate by 25 basis points (bps) to 3.25% on Thursday. This was the second consecutive interest rate cut by the ECB and the third this year. The central bank was widely anticipated to cut interest rates further, with recent comments from several ECB officials suggesting they are more concerned about reviving economic growth, with high confidence that inflation will be kept under control.
At the press conference after the interest rate decision, ECB President Christine Lagarde did not offer any clues about a possible interest rate action in December, but sounded confident that the disinflation process is going well. directed. However, traders have priced in an additional 25 bps rate cut at the last meeting this year.
When asked about the possible threats to the Eurozone economy from a victory by former US President Donald Trump in the presidential election, Lagarde said, “Any trade obstacle is a ‘disadvantage’ for Europe,” Reuters reported. . He added, “Any restriction, any uncertainty, any obstacle to trade matters for an economy like the European one, which is very open,” adding that the ECB was also “very attentive” to possible movements in oil prices linked to the conflict in the Middle East.
Euro PRICE Today
The table below shows the percentage change of the Euro (EUR) against the main currencies today. Euro was the strongest currency against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.28% | -0.15% | -0.03% | -0.24% | -0.26% | 0.02% | |
| EUR | 0.15% | -0.11% | 0.02% | 0.12% | -0.11% | -0.10% | 0.18% | |
| GBP | 0.28% | 0.11% | 0.12% | 0.24% | 0.02% | 0.02% | 0.26% | |
| JPY | 0.15% | -0.02% | -0.12% | 0.14% | -0.10% | -0.13% | 0.14% | |
| CAD | 0.03% | -0.12% | -0.24% | -0.14% | -0.22% | -0.23% | 0.01% | |
| AUD | 0.24% | 0.11% | -0.02% | 0.10% | 0.22% | -0.02% | 0.24% | |
| NZD | 0.26% | 0.10% | -0.02% | 0.13% | 0.23% | 0.02% | 0.26% | |
| CHF | -0.02% | -0.18% | -0.26% | -0.14% | -0.01% | -0.24% | -0.26% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change shown in the box will represent EUR (base)/USD (quote).
Daily Market Drivers Summary: EUR/USD Remains Fragile as More ECB Rate Cuts on the Way
- EUR/USD takes a pause on Friday after a four-day losing streak. The shared currency pair is struggling to hold its ground as the US Dollar (USD) rally appears to have stalled. The US Dollar Index (DXY), which tracks the value of the Dollar against six major currencies, is struggling to extend its rise above the immediate resistance of 103.90.
- The US dollar takes a breather, while its outlook remains firm as upbeat data from the United States (US) on Thursday pointed to economic resilience. US retail sales data, a key measure of consumer spending, rose at a faster-than-expected pace of 0.4% in September. Additionally, initial jobless claims for the week ending October 11 were 241K, below estimates of 260K.
- In recent weeks, the US dollar has outperformed its major peers as traders have dismissed market speculation that the Federal Reserve (Fed) will deliver another larger-than-usual rate cut of 50 basis points (bps) in November . As September US data has eased fears of a possible slowdown, traders expect the Fed to cut interest rates gradually.
- According to the CME FedWatch tool, traders are pricing in two 25 basis point (bps) rate cuts in November and December, which will push interest rates down to the 4.25%-4.50% range by the end of the year.
- Looking ahead, investors will focus on market expectations for the US presidential election. Currently, there is a very close race between Donald Trump and Kamala Harris. According to FiveThirtyEight’s daily election poll tracker, Harris is leading in the polls and has a 2.4 percentage point lead over Trump.
Technical Analysis: EUR/USD remains below the 200-day EMA
EUR/USD tries to hold the immediate support of 1.0800 in European trading hours. The major currency pair extended its decline after breaking below the 200-day EMA, trading around 1.0910, earlier this week.
The downward move in the shared currency pair began after a breakout of the double top formation on a daily time frame near the September 11 low around 1.1000, resulting in a bearish reversal.
The 14-day Relative Strength Index (RSI) falls below 30.00, indicating strong bearish momentum although entering oversold conditions.
To the downside, the main pair could find support near the ascending trend line at 1.0750, which is drawn from the October 3 low around 1.0450. Meanwhile, the 200-day EMA and the psychological figure of 1.1000 will be the key resistances for the pair.
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.
