The Euro (EUR) showing marginal loss as EUR/USD consolidates around yearly highs
The Euro (EUR) is currently experiencing a slight decrease in value on the market, but the EUR/USD pair has been trading in a narrow range as it consolidates near its highest point of the year. According to Scotiabank’s Chief FX Strategist Shaun Osborne, this consolidation phase could indicate either a correction or a period of consolidation in the current bull run.
The Federal Reserve’s policy outlook has been a major factor driving the gains in EUR/USD, but the European Central Bank (ECB) also plays a significant role. While the market is confident that the ECB will cut rates by 25 basis points on September 12th, there are potential obstacles to another rate cut, particularly related to wage gains in Germany.
Recent data from Germany’s Bundesbank shows a significant increase in collective earnings agreements, which could lead to higher inflation. The ECB is set to release Q2 wage data, and if there is another strong increase in wages, it could impact market expectations for further easing by the ECB.
Despite these potential challenges, the Euro has been on a solid bull trend, surpassing the 200-week moving average and approaching a high from late 2023. The indicators are currently showing bullish signals across various timeframes, but there is a risk of a correction or consolidation in the near future. Key support levels for the Euro are around 1.1000/05.
In conclusion, the Euro’s performance against the US Dollar is influenced by various factors, including central bank policies and economic data. As an investor or individual interested in finance, it is important to keep an eye on these developments to understand how they may impact your investments or financial decisions. It’s crucial to stay informed and be prepared for potential market fluctuations in order to make well-informed choices regarding your finances.