EUR/USD Dips Slightly to 1.07693 Amid ECB Rate Cut Speculation

The EUR/USD currency pair has faced downward pressure amidst speculation regarding potential rate cuts by the European Central Bank (ECB).

Arslan Butt•Thursday, April 4, 2024•2 min read

The EUR/USD currency pair has faced downward pressure amidst speculation regarding potential rate cuts by the European Central Bank (ECB). Concerns over softer inflation in both Germany and the Eurozone have heightened expectations for an ECB interest rate cut, contributing to the bearish performance of the EUR/USD pair.

Weaker US Dollar Offers Support Amid Fed’s Easing Expectations

While the Euro has struggled, the EUR/USD pair found support from a weaker US Dollar Index (DXY), which dipped below the 105.00 mark. The US Federal Reserve’s softened stance and expectations of easing beginning in the June meeting have added pressure on the greenback, offering modest support to the EUR/USD pair.

Eurozone and German Inflation Impact ECB Policy and EUR/USD

German and Eurozone inflation data have fueled speculation of imminent interest rate cuts by the ECB. While German inflation slightly eased, falling below market expectations, the Eurozone’s inflation also moderated, indicating challenges for the ECB in meeting its inflation target.

Market Reaction to Economic Data and ECB Announcements

Investors closely monitor economic data and ECB announcements, as they weigh on the euro and create volatility in the EUR/USD pair. The ECB’s struggle to meet its inflation goal could significantly impact policy decisions and market sentiment, influencing the direction of the EUR/USD pair.

EUR/USD Technical Outlook

In today’s technical outlook for EUR/USD, the currency pair stands at 1.07693, indicating a marginal downtrend of -0.00%. Key price levels reveal a pivot point at $1.0778, with immediate resistance expected at $1.0804, followed by $1.0838 and $1.0864.

On the downside, immediate support lies at $1.0731, with subsequent levels at $1.0695 and $1.0658. Technical indicators show the Relative Strength Index (RSI) at 46, suggesting neutral momentum.

The 50-day Exponential Moving Average (EMA) stands at 1.0798. The overall trend remains bearish below $1.0778, with the potential for a shift towards a more bullish bias upon breaking above this level.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.