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EUR/USD is under selling pressure and is currently trading around 1.0842, ahead of the release of PMI readings for the manufacturing and services sectors of the eurozone and US economies. According to reliable trading platforms, at the beginning of this week's trading, the euro price fluctuated around $1.088, as traders and investors eagerly await the European Central Bank's upcoming monetary policy review. Accordingly, the single European currency recently retreated from its four-month high of $1.094, which it recorded on July 17, indicating uncertainty in the market.
The European Central Bank is expected to cut interest rates
In this regard, according to data from Trading Economics, market speculation indicates that the European Central Bank may cut interest rates twice more before the end of the year, with adjustments likely to start as early as September. Moreover, Vice President Luis de Guindos stressed the importance of the new macroeconomic outlook in September to guide the Bank's policy decisions ECB actions and future decisions
The ECB held interest rates steady last week, in line with market expectations. President Christine Lagarde said that the decision on monetary policy adjustments for September remains open and will depend on upcoming economic data and forecasts. Obviously, this cautious approach highlights the ECB's commitment to data-driven decisions amid evolving economic conditions Economic Data Releases
Traders and analysts are eagerly awaiting the release of flash Purchasing Managers' Index (PMI) data for July for the eurozone, Germany and France this week. The data will provide important insights into the health and economic performance of these key regions, providing guidance to market participants dealing with ongoing euro volatility Sentiment and Future Outlook
The recent weakness in the euro from its peak reflects underlying market anxiety, as traders speculate on the ECB's next moves. Furthermore, the expectation of interest rate cuts and the confirmation of the new macroeconomic forecasts underscore the ECB's accommodative strategy in response to economic indicators. Therefore, the upcoming PMI data will be a crucial factor in shaping market sentiment and the outlook for the euro's trajectory.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Key Economic Indicators
According to the economic calendar, Flash PMI data for the eurozone, Germany and France will serve as a barometer of economic activity and sentiment in these key regions. A stronger-than-expected PMI reading could boost the euro, while a weaker one could bolster expectations for further monetary easing by the ECB.
Meanwhile, the euro is hovering around the $1.088 level, the market remains focused on the upcoming ECB policy review and the release of important economic data. The central bank's decisions, guided by the new economic forecasts and indicators, will play a pivotal role in determining the euro's trajectory in the coming months. Investors and traders should therefore stay tuned to these developments to weather potential volatility in the currency markets.
Eurozone consumer sentiment improves more than expected
The eurozone consumer confidence index rose 1.0 points from the previous month to -13 in July 2024, the highest level since February 2022 and above market expectations of -13.4, according to a preliminary estimate. Meanwhile, the European Central Bank's recent decision to cut interest rates in June due to a gradual slowdown in inflation has fueled optimism. Concurrently, Markets are generally optimistic about further rate cuts in September and possibly December. Political concerns in France have also eased after the parliamentary elections, with concerns about one-party dominance giving way to legislative gridlock. In the wider EU, consumer sentiment also showed an improvement, rising 0.7 points to 2/USD Technical analysis and forecast:
According to the performance on the daily chart attached, the Euro against the US Dollar EUR/USD price is moving in a bearish trend and breaking the support 1.0800 will confirm the strength of the bears' control and thus prepare for stronger losses. The next level will be 1.0730 and 1.0660. From the last level, the technical indicators will move towards strong oversold levels. On the other hand, and over the same period of time, the psychological resistance 1.10 will remain the most important for the strength of the upward trend. All of this will depend on the future policies of global central banks, economic performance, and who will lead the United States of America as president after Biden.
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