Euro (EUR) Losses Extend as Investors Anticipate ECB Policy Decision
As the Euro (EUR) continues to experience losses, investors are closely monitoring the upcoming European Central Bank (ECB) policy decision. According to Shaun Osborne, Chief FX Strategist at Scotiabank, the EUR’s downward trend is expected to persist as the central bank considers easing measures.
Market Expectations for ECB Policy Decision
- A 1/4 point interest rate cut is largely anticipated for the upcoming ECB meeting on the 17th.
- Investors are also pricing in another 25bps cut for December, reflecting concerns about the Euro’s outlook.
- Short-term spreads compared to the USD are widening, putting pressure on the EUR’s performance.
Technical Analysis and Outlook
Despite a minor consolidation above 1.0950, the EUR has continued to decline, maintaining a negative technical tone following last week’s significant drop below key support at 1.10.
- The 100-day Moving Average (MA) at 1.0934 may offer some temporary support for the EUR.
- However, near-term risks suggest a potential push towards 1.0875/80, with further losses likely to extend to the low 1.08 range.
Analysis and Implications for Investors
As the EUR faces ongoing downward pressure, investors need to consider the following implications:
- Increased uncertainty surrounding the ECB’s monetary policy decisions could lead to heightened market volatility.
- Traders should monitor key support levels, such as 1.0875/80, for potential reversal or continuation patterns.
- Longer-term trends may be influenced by the ECB’s actions, making it crucial to stay informed and adapt trading strategies accordingly.