Instrument: EURUSD
Bullish Preference:
Buy position is envisaged if price trades above 1.07896 With take profit at 1.08068
Bearish Preference:
Sell position is envisaged if price trades below 1.07546 with Take profit at 1.07378
Fundamentals:
USD: Core CPI m/m 2:30 PM
CPI m/m 2:30PM
CPI y/y 2:30PM
Comment:
The euro opened the week pretty flat as markets prepare for central bank decisions later this week alongside some supplementary data that could sway the messaging provided by the two central banks. Leading up to these announcements, European Central Bank (ECB) interest rate expectations have been ‘dovishly’ repriced after taking into account eurozone data while the Federal Reserve may be less inclined to rush into heavy rate cuts due to its
comparatively more resilient economy. This resilience was reinforced by last week’s Non-Farm Payrolls (NFP) report that highlighted the robust labor market in the US. Money markets currently price in the first ECB cut around March/April next year. From a Fed perspective, Goldman Sachs stated this morning that they expect the Fed to deliver its first rate cut in Q3 2024 vs Q4 2024 in their previous forecast. In summary, the euro area is showing signs of significantly weaker economic data relative to the US and could weigh negatively on the EUR moving forward.
Analysis: SCRUM Team