- EUR/USD recovers mildly while its outlook remains uncertain as the ECB is expected to extend its policy-easing cycle.
- A victory of Donald Trump in the US presidential elections would significantly impact the Eurozone economy.
- Investors expect the Fed to follow the rate-cut path gradually.
EUR/USD recovers mildly on Friday after posting a fresh 10-week low near 1.0800 on Thursday. The outlook of the major currency pair remains bearish as the Euro (EUR) could face selling pressures on expectations that more interest rate cuts from the European Central Bank (ECB) are in the pipeline.
The ECB reduced its Rate on Deposit Facility by 25 basis points (bps) to 3.25% on Thursday. This was the second straight interest rate cut by the ECB and the third of this year. The central bank was widely anticipated to reduce interest rates further as recent commentaries from various ECB officials suggested that they are more concerned about reviving economic growth, with high confidence over inflation remaining under control.
In the press conference after the interest rate decision, ECB President Christine Lagarde did not offer any cues for likely interest rate action in December but was confident that the disinflation process is well on track. However, traders have priced in an additional 25-bps interest rate cut at the last meeting of this year.
When asked about the likely threats to the Eurozone economy from a victory of former US President Donald Trump in the presidential elections, Lagarde said, “Any trade obstacles were a ‘downside’ for Europe,” Reuters reported. She added, "Any restriction, any uncertainty, any obstacles to trade matter for an economy like the European economy, which is very open," adding that the ECB was also "very attentive" to possible oil price moves linked to the Middle East conflict.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.28% | -0.15% | -0.03% | -0.24% | -0.26% | 0.02% | |
| EUR | 0.15% | -0.11% | 0.02% | 0.12% | -0.11% | -0.10% | 0.18% | |
| GBP | 0.28% | 0.11% | 0.12% | 0.24% | 0.02% | 0.02% | 0.26% | |
| JPY | 0.15% | -0.02% | -0.12% | 0.14% | -0.10% | -0.13% | 0.14% | |
| CAD | 0.03% | -0.12% | -0.24% | -0.14% | -0.22% | -0.23% | 0.01% | |
| AUD | 0.24% | 0.11% | -0.02% | 0.10% | 0.22% | -0.02% | 0.24% | |
| NZD | 0.26% | 0.10% | -0.02% | 0.13% | 0.23% | 0.02% | 0.26% | |
| CHF | -0.02% | -0.18% | -0.26% | -0.14% | -0.01% | -0.24% | -0.26% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily digest market movers: EUR/USD remains fragile as more ECB rate cuts in the pipeline
- EUR/USD takes a breather on Friday after a four-day losing streak. The shared currency pair strives to hold its feet as the US Dollar (USD) rally appears to have paused. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, struggles to extend its upside above the immediate resistance of 103.90.
- The Greenback takes a time out, while its outlook remains firm as Thursday’s upbeat United States (US) data pointed to economic resilience. The US Retail Sales data, a key measure of consumer spending, rose at a faster-than-expected pace of 0.4% in September. Also, Initial Jobless Claims for the week ending October 11 came in lower at 241K than estimates of 260K.
- Over the past few weeks, the US Dollar has been outperforming its major peers as traders priced out market speculation of the Federal Reserve (Fed) to deliver another larger-than-usual interest rate cut of 50 basis points (bps) in November. As September US data has diminished fears of a potential slowdown, traders expect the Fed to cut interest rates gradually.
- According to the CME FedWatch tool, traders are pricing in two rate cuts of 25 basis points (bps) in November and December, which will push interest rates lower to 4.25%-4.50% by the year-end.
- Going forward, investors will focus on market expectations over the US presidential elections. Currently, there is a neck-to-neck competition between Donald Trump and Kamala Harris. According to FiveThirtyEight’s daily election poll tracker, Harris is leading polls and has a 2.4-percentage-point lead over Trump.
Technical Analysis: EUR/USD stays below 200-day EMA
EUR/USD endeavors to hold the immediate support of 1.0800 in European trading hours. The major currency pair extended its downfall after breaking below the 200-day Exponential Moving Average (EMA), which trades around 1.0910, earlier this week.
The downside move in the shared currency pair started after a breakdown of the Double Top formation on a daily timeframe near the September 11 low at around 1.1000, which resulted in a bearish reversal.
The 14-day Relative Strength Index (RSI) dives below 30.00, indicating a strong bearish momentum though entering in oversold conditions.
On the downside, the major could find support near the upward-sloping trendline at 1.0750, which is plotted from the October 3 low around 1.0450. Meanwhile, the 200-day EMA and the psychological figure of 1.1000 will be the key resistances for the pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to recovery gains near 1.0850 ahead of Fedspeak
EUR/USD trades in positive territory near 1.0850 on Friday following a four-day slide. China's stimulus optimism and a broad US Dollar correction help the pair retrace the dovish ECB decision-induced decline. All eyes remain on the Fedspeak.
GBP/USD pares UK data-led gains at around 1.3050
GBP/USD is trading at around 1.3050 in the second half of the day on Friday, supported by upbeat UK Retail Sales data and a pullback seen in the US Dollar. Later in the day, comments from Federal Reserve officials will be scrutinized by market participants.
Gold at new record peaks above $2,700 on increased prospects of global easing
Gold (XAU/USD) establishes a foothold above the $2,700 psychological level on Friday after piercing through above this level on the previous day, setting yet another fresh all-time high. Growing prospects of a globally low interest rate environment boost the yellow metal.
Crypto ETF adoption should pick up pace despite slow start, analysts say
Big institutional investors are still wary of allocating funds in Bitcoin spot ETFs, delaying adoption by traditional investors. Demand is expected to increase in the mid-term once institutions open the gates to the crypto asset class.
Canada debates whether to supersize rate cuts
A fourth consecutive Bank of Canada rate cut is expected, but the market senses it will accelerate the move towards neutral policy rates with a 50bp step change. Inflation is finally below target and unemployment is trending higher, but the economy is still growing.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.