As the world’s leading investment manager and financial market journalist, I am here to bring you the latest insights on the EUR/USD currency pair. With the European Central Bank’s recent stance and dovish expectations for the Fed, EUR/USD is once again eyeing the key level of 1.11.
No Technical Resistance before 1.120
According to ING’s FX strategist Francesco Pesole, President Christine Lagarde’s approach of maintaining quiet and predictable communication has been well received by the markets. While hinting at potential policy rate cuts in the future, Lagarde emphasized the importance of data dependency.
The EUR OIS curve now indicates a slightly higher year-end deposit rate, suggesting that markets are pricing in potential easing measures in the eurozone. Despite this, a significant move by the Fed could offset any impact on the EUR/USD swap rate gap, keeping support for EUR/USD intact.
Looking ahead, investors will be monitoring speeches from ECB officials and other key figures in the eurozone. With expectations of USD weakness, there is a possibility of EUR/USD breaking above 1.110 in the coming days, with no major technical resistance until the August highs of 1.120.
Analysis:
In summary, the recent developments in central bank policies and market expectations have created a bullish sentiment for EUR/USD. With the potential for further rate cuts in the eurozone and a dovish outlook for the Fed, the currency pair is poised to continue its upward trajectory towards the key level of 1.120. Investors should keep a close eye on upcoming events and speeches for further insights into the future direction of EUR/USD.