The Euro (EUR) remained relatively unchanged in overnight trading, hovering around the 1.1040 levels, according to OCBC FX strategists Frances Cheung and Christopher Wong.
EUR/USD Expected to Stay Below 1.1040
Technical analysts predict that the EUR/USD pair will continue to trade below the key level of 1.1040, with support levels at 1.10 and 1.0930. Resistance is seen at 1.12 and 1.1280.
The recent softening of CPIs in the Euro area, Germany, and Spain, combined with a weaker manufacturing PMI print, has raised expectations that the European Central Bank (ECB) may cut rates at its upcoming meeting on September 12. Markets have already priced in a 25 basis point cut for this meeting, with expectations of further cuts throughout the year.
If economic data continues to disappoint, it could lead to a more dovish stance from the ECB and further downward pressure on the Euro. This week, investors will be closely watching services PMI, PPI, retail sales, and GDP figures for further insights into the Eurozone economy.
Analysis:
The Euro’s stability is being tested as investors brace for a potential rate cut by the ECB. If economic data continues to underwhelm, we could see a more significant impact on the Euro’s value. It’s crucial for investors to stay informed about upcoming ECB decisions and economic indicators to make informed decisions about their finances.