EUR/USD Outlook: A Comprehensive Analysis by the Top Investment Manager
Overview:
- The EUR/USD pair hit a two-month low of 1.0900, ending the week at around 1.0940.
- US Dollar (USD) gained strength following the release of the FOMC Minutes and CPI data.
US Market Analysis:
The FOMC Minutes revealed a consensus for a potential 50 bps rate cut, but the Fed is expected to opt for a 25 bps cut in November. This decision was influenced by stronger-than-expected employment data and the Fed’s goal to balance inflation risks.
Key US economic indicators:
- September CPI rose by 0.2%, slightly above market expectations.
- Initial Jobless Claims increased unexpectedly by 258K.
- September PPI rose by 1.8% YoY, exceeding expectations.
European Market Analysis:
European data showed mixed results with German Factory Orders declining, but Industrial Production and Retail Sales seeing some positive movements. The ECB is expected to announce a 25 bps rate cut to tackle economic setbacks in the Eurozone.
Key European economic indicators:
- Eurozone Retail Sales increased by 0.8% in August.
- Sentix Investor Confidence improved in October.
Global Factors Impacting EUR/USD:
Market sentiment is influenced by China’s stimulus measures, Middle East tensions, and Wall Street’s optimism. These factors contribute to the fluctuating EUR/USD pair.
Upcoming Events:
The ECB monetary policy decision is set for Thursday, with expectations of a 25 bps rate cut. Key economic releases include the EU Industrial Production, HICP, Germany’s ZEW Survey, and US Retail Sales and Industrial Production figures.
Technical Analysis:
From a technical standpoint, the EUR/USD pair remains bearish, with key support at 1.0900 and resistance at 1.1000. Technical indicators suggest a potential correction, but the overall trend favors a downward trajectory.
Analysis Summary:
The EUR/USD pair is heavily influenced by US and European economic factors, along with global market sentiment. The upcoming ECB decision and key economic releases will likely impact the pair’s movement. From a technical perspective, the outlook remains bearish, with support levels at 1.0900 and 1.0800. Traders should closely monitor economic data and central bank announcements for potential trading opportunities.