- Markets are almost certain that the European Central Bank will cut rates today.
- The Bank of Canada has opened the door to more global interest rate cuts.
- Data from the US revealed a larger-than-expected fall in private sector employment in May.
The EUR/USD forecast is slightly bullish as the euro remains steady ahead of the ECB’s policy meeting, where a rate cut is widely expected. Despite the looming rate cut, the euro rallied, primarily as the dollar fell amid growing expectations of a Fed rate cut.
–Are you interested in learning more about tips for Forex traders? Check out our detailed guide-
Markets are all but certain that the European Central Bank will cut rates today, becoming the second major central bank to do so. The Bank of Canada began its cycle of interest rate cuts last session, opening the door for more rate cuts globally.
However, recent data from the Eurozone revealed higher-than-expected inflation, raising uncertainty about the outlook beyond June. Therefore, investors will pay close attention to Christine Lagarde’s speech after the policy meeting.
Meanwhile, US data revealed a larger-than-expected fall in private sector employment in May. The number of jobs fell from 188,000 to 152,000, which indicates an easing of labor market conditions. The report followed the US jobs report, which showed a decline in job vacancies. However, another report from the Institute for Supply Management on Wednesday showed a shift to expansion in the services sector, which slightly complicated the outlook for a Fed rate cut.
However, by the end of the day, the probability of a rate cut in September rose to 69% from 59%. Furthermore, investors were betting on at least a 50 basis point Fed rate cut in 2024, weighing on the dollar.
EUR/USD key events today
- ECB main refinancing rate
- ECB Monetary Policy Statement
- US unemployment claims
- ECB press conference
EUR/USD Technical Forecast: Price is consolidating near the key level of 1.0880
On the technical side, the EUR/USD price is moving sideways near the key level of 1.0880. However, the bias is bullish as the price is above the 30-SMA and the RSI is slightly above 50. The bulls recently made a new high above 1.0880 but could not sustain a move higher. As a result, the price pulled back to retest the 30-SMA.
–Are you interested in learning more about forex brokers? Check out our detailed guide-
A break below the SMA would indicate solid bearish momentum, allowing EUR/USD to retest the support level at 1.0800. However, if the SMA remains firm as support, the price is likely to seek higher highs, with the first target at 1.0925.
Do you want to trade Forex now? Invest in eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money.
