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by The EUR/USD has dropped to its lowest since mid-August, now trading below $1.098. This significant drop is primarily due to the varying approaches to monetary policy adopted by the European Central Bank (ECB) and the US Federal Reserve.
Economic Slowdown in the Eurozone
Economic growth in the Eurozone has been slow, and recent data show inflation rates falling below the ECB’s target of 2% in September. This cooling inflation has sparked widespread expectations that the ECB might reduce interest rates at its upcoming October meeting. This would be the third rate reduction in the current year if realized.
ECB’s Stance on Monetary Policy
Key figures within the ECB, including President Christine Lagarde, have expressed support for further rate cuts. This stance reflects the central bank’s commitment to reviving economic activity and achieving stable inflation levels within the Eurozone.
Meanwhile, in the United States, a robust employment report has lessened the chances of a significant rate cut by the Federal Reserve. This development has contributed to a stronger dollar, which has exerted additional downward pressure on the Euro.
- Also read: USD/MXN Analysis – 4-October-2024
EURUSD Fundamental Analysis – 7-October-2024
EURUSD Fundamental Analysis – 7-October-2024
The EUR/USD pair tests 1.095 support in today’s trading session. Meanwhile, the Stochastic Oscillator and RSI 14 show the market is oversold, meaning the trend could reverse from this point or step into a consolidation phase.
From a technical standpoint, if the EUR/USD price holds above the 1.095 critical resistance, the price can potentially rise and revisit the 1.102 resistance area.
Conversely, if bears or sellers dip below the 1.095 mark, the downtrend will likely be triggered again. If this scenario unfolds, the next bearish target will likely be the 1.088 support. Source FxNews—EUR/USD Technical Analysis.
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