EUR/USD trending downwards, preliminary downward target at 1.0760
Forex analyst Gary Howes predicts that the EUR/USD may further weaken this week, with an initial downward target of 1.0760.
If the euro/dollar can break through the 9-day moving average (currently at 1.0815), there may be consolidation. At present, the exchange rate is close to this level and there seems to be hope for a breakthrough.
From a technical perspective, with preliminary inflation data from Spain and Germany in October, the euro may see a potential boost on Wednesday. It was the September inflation data of these two countries that caused the euro to fall when it was released earlier this month, and two weeks later led to the European Central Bank cutting interest rates.
The market expects a slight rebound in Eurozone inflation by the end of the year, and if confirmed this week, it may have a buffering effect on the euro. Lower than expected inflation data will only make people more convinced that the ECB must take action, which will put pressure on the euro.
The overall inflation data for the Eurozone will be released on Thursday, although recent history suggests that the market typically receives guidance from the German and Spanish data released the day before.
The US dollar will still be the most important driving factor, and Friday's US labor market data will be the focus of this week's events.
Foreign exchange analyst Gary Howes said that if the US non farm payroll data for October in the report exceeds expectations, US yields will remain firm as market expectations for the Fed's rate cuts in the coming months decrease. This will boost the US dollar and trigger a new multi week low for the euro against the US dollar.
EUR/USD daily chart
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