EUR/USD Nears One-Week Low Ahead of Crucial ECB Decision
The EUR/USD pair remains on the defensive in the Asian trading session on Thursday, currently trading around the 1.0560 area, or its lowest level in a week, as traders eagerly anticipate the European Central Bank's (ECB) interest rate decision.
The EUR/USD exchange rate has continued its decline for the second consecutive day, extending its retreat from monthly highs. Support has been found around the 20-day Simple Moving Average (SMA) at 1.0560. Technical indicators on the daily chart paint a mixed picture, with momentum hovering around the middle but trending downwards, and the Relative Strength Index (RSI) showing a positive slope but also veering south.
The pair is presently testing the support zone around 1.0560. On the 4-hour chart, technical indicators signal a downtrend. The main support level lies at the upward trendline around 1.0550. As long as the price remains above this level, the Euro's recovery potential remains intact. However, a breakdown below this price level could lead to further losses, initially targeting 1.0530 and then 1.0500. For a technical outlook to shift bullish, the Euro needs to rise above the 1.0610 level.
The EUR/USD exchange rate dipped below 1.0600 for the second consecutive day due to the stronger US Dollar. The focus now turns to the European Central Bank (ECB) meeting and US economic data.
Germany's IFO business survey surprised with an increase, with the headline figure at 86.9, surpassing the expected 85.9. This is the first rise since April. The Eurozone central bank reported a decrease in the annual growth rate of private lending to -0.8% from 1% in August.
The ECB is expected to maintain interest rates on Thursday, given the slowdown in inflation and the still sluggish economic activity. Discussions are likely to revolve around modifying reserve requirements and the balance sheet. ECB President Christine Lagarde may maintain a hawkish stance due to elevated inflation levels and to appease hawks within the Bank.
In the US, housing data released on Wednesday exceeded expectations. On Thursday, crucial data will be released, focusing on the Gross Domestic Product (GDP) for the third quarter (including Core Personal Consumption Expenditure Price Index). Additionally, Initial Jobless Claims and Durable Goods Orders will be relevant. Strong data could further strengthen the US Dollar, while negative surprises might trigger corrections.
Feel free to let me know if you need further information or specific details added.
The EUR/USD exchange rate has continued its decline for the second consecutive day, extending its retreat from monthly highs. Support has been found around the 20-day Simple Moving Average (SMA) at 1.0560. Technical indicators on the daily chart paint a mixed picture, with momentum hovering around the middle but trending downwards, and the Relative Strength Index (RSI) showing a positive slope but also veering south.
The pair is presently testing the support zone around 1.0560. On the 4-hour chart, technical indicators signal a downtrend. The main support level lies at the upward trendline around 1.0550. As long as the price remains above this level, the Euro's recovery potential remains intact. However, a breakdown below this price level could lead to further losses, initially targeting 1.0530 and then 1.0500. For a technical outlook to shift bullish, the Euro needs to rise above the 1.0610 level.
The EUR/USD exchange rate dipped below 1.0600 for the second consecutive day due to the stronger US Dollar. The focus now turns to the European Central Bank (ECB) meeting and US economic data.
Germany's IFO business survey surprised with an increase, with the headline figure at 86.9, surpassing the expected 85.9. This is the first rise since April. The Eurozone central bank reported a decrease in the annual growth rate of private lending to -0.8% from 1% in August.
The ECB is expected to maintain interest rates on Thursday, given the slowdown in inflation and the still sluggish economic activity. Discussions are likely to revolve around modifying reserve requirements and the balance sheet. ECB President Christine Lagarde may maintain a hawkish stance due to elevated inflation levels and to appease hawks within the Bank.
In the US, housing data released on Wednesday exceeded expectations. On Thursday, crucial data will be released, focusing on the Gross Domestic Product (GDP) for the third quarter (including Core Personal Consumption Expenditure Price Index). Additionally, Initial Jobless Claims and Durable Goods Orders will be relevant. Strong data could further strengthen the US Dollar, while negative surprises might trigger corrections.
Feel free to let me know if you need further information or specific details added.
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