The Euro/USD pair saw a significant increase in value on Thursday, continuing its upward trend towards the 1.1100 mark. Technical buyers are eyeing the potential support at 1.1100, following the European Central Bank’s decision to lower benchmark interest rates by 25 basis points.
The ECB’s move to decrease interest rates as expected has impacted the currency market. The deposit facility rate now stands at 3.5%, with reductions also seen in the marginal lending facility and main refinancing operations rates. The ECB emphasized a data-driven approach in determining future rate adjustments, with President Christine Lagarde refraining from speculating on the next rate cut during the post-meeting press conference.
Despite the ECB’s actions, the Euro received a boost against the US Dollar, leading to the rise in EUR/USD value. Additionally, the Producer Price Index (PPI) in the US showed a 1.7% increase in August, below expectations, prompting discussions of a potential 50 basis points rate cut by the Federal Reserve in September, which contributed to the USD’s decline.
Looking ahead, the US economic calendar will feature the University of Michigan’s Consumer Sentiment Survey for September, which is not expected to have a significant impact on USD valuation.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart indicates bullish momentum for EUR/USD, with resistance levels at 1.1090-1.1100. A breakthrough could lead to targets at 1.1160 and 1.1200. On the downside, support levels are at 1.1060, 1.1040, and 1.1020.
Euro FAQs
The Euro is the currency used by 20 European Union countries in the Eurozone, accounting for a significant portion of global foreign exchange transactions. The European Central Bank (ECB) plays a crucial role in managing the Eurozone economy through interest rate adjustments and monetary policy decisions made at regular meetings. Economic indicators such as inflation data, GDP, and trade balance influence the Euro’s value and performance in the market.