EUR/USD Forecast: ECB Expected to Cut Rates, USD Strengthens After Disappointing US CPI Data
- US CPI data falls short of expectations, dampening hopes for aggressive Fed rate cut
- ECB expected to announce 25 basis points rate cut, Eurozone recession concerns linger
- EUR/USD hovers near 1.1000 mark, downside pressure remains
The EUR/USD pair dropped to 1.1001 following the release of US CPI data, with the pair now trading around 1.1020. The market sentiment turned cautious as the CPI figures raised doubts about a 50 bps Fed rate cut. Wall Street saw initial losses but recovered slightly, while the US Dollar held onto its gains.
All eyes are now on the ECB’s upcoming decision on monetary policy, with expectations high for a rate cut in response to easing price pressures and concerns about a Eurozone recession. The technical outlook for EUR/USD remains bearish, with key support at 1.1000 and resistance at 1.1050.
EUR/USD Technical Analysis
In the daily chart, EUR/USD shows a downward bias with moving averages and technical indicators supporting further downside. In the 4-hour chart, a break below 1.1000 could trigger a new wave of selling pressure towards 1.0900.
Support levels: 1.0990, 1.0950, 1.0910
Resistance levels: 1.1050, 1.1090, 1.1140
Overall, the combination of disappointing US data, ECB rate cut expectations, and technical signals point to further downside for EUR/USD in the near term, with potential implications for investors and traders looking to navigate the forex market.