Analysis of the euro against the US dollar EUR/USD
Prior to the announcement of the US economic growth figure later today, the price of the EUR/USD currency pair stabilizes around the level of 1.0829 after recovering yesterday to the resistance level of 1.0866. As I mentioned before, the performance may remain in narrow ranges until the markets and investors react to the announcement. About the US growth reading and the US Federal Reserve’s preferred inflation reading, then the Eurozone inflation numbers.
in general. Monetary policy developments will remain a key component of currency market sentiment. There was a general decline in expectations for early interest rate cuts by both the European Central Bank and the Bank of England. According to futures markets, confidence in the ECB's April rate cut continues to fade with the focus now on June. In his comments over the weekend, ECB Council Member Stournaras noted; B “The recent slowdown in wages gives hope that we are on the right track. But we will not have enough information to make a decision on interest rate cuts before the end of the second quarter.
According to the economic calendar, the latest inflation data in the euro zone will be announced on Friday. The consensus forecast is for the headline rate to fall to 2.5% from 2.8%, with the base rate falling to 2.9% from 3.3%. In this regard, ING Bank commented: B “A drop in core inflation below 3.0% may prompt ECB dovish voices, but the consensus within the Governing Council appears to be geared towards waiting for wages data in early 2024 before taking steps to ease policy.”
On another level, with increasing expectations that Trump will lead the United States of America again. The head of the European Central Bank said she fears a punitive tariff regime, and she has good reason. Bloomberg reported that if he regains office, Trump plans to target the European Union with a wide range of combative trade measures.
Although attacks on the European Central Bank from within the 20-nation eurozone have been relatively innocuous compared with what its peers endure outside it, considering these precedents may encourage policymakers to see attack as the best form of defence. From Thailand to Turkey, a series of high-profile disagreements over pressures on monetary policymakers have intensified the debate.
Overall, flows at the end of February are likely to lead to a weakness in the US dollar, according to Credit Agricole Bank's assessment of potential flows in the Forex market at the end of the month. According to analysts at the European Bank, the performance of the US dollar in February indicates a moderate sell-off in the US dollar at the end of the month, especially against the Canadian dollar and the Australian dollar.
EUR/USD forecast today:
According to the performance on the daily chart below, the price of the EUR/USD currency pair is in a neutral position, and the general upward trend will not be confirmed without moving towards the psychological resistance level of 1.1000 again. On the other hand, over the same period of time, the EUR/USD pair will return to its broader downward path by moving towards the 1.0730 support level again. All focus today will be on the US economic data and the statements of some US Central Bank policy officials.
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