- ECB President Christine Lagarde said there is no predetermined path for interest rate cuts.
- The probability of another 25 basis point ECB rate cut fell from 30% to 20%.
- Former Fed policymaker Bill Dudley noted a solid case for a 50 bps rate cut.
The EUR/USD outlook is tilted to the upside after ECB officials gave no clear guidance on future rate cuts. The cautious tone led to a drop in ECB rate cut expectations, which strengthened the euro. Meanwhile, the dollar remained vulnerable after news outlets on Friday renewed bets on a 50 bps Fed rate cut this week.
–Are you interested in learning more about STP brokers? Check out our detailed guide-
The European Central Bank cut rates by 25 basis points on Thursday as expected. However, market participants were expecting clear guidance on futures cuts. ECB President Christine Lagarde said there is no predetermined path for interest rate cuts. Therefore, the central bank will decide each meeting. Furthermore, she noted that the inflation of services is still high. Market participants took this message as less chance of another rate cut in October. As a result, the probability of another 25 bps rate cut fell from 30% to 20%.
The gradual pace of rate cuts in the Eurozone could differ from the expected aggressive cycle of Fed rate cuts. In particular, expectations for a super-major September Fed rate cut on Friday have risen. Former Fed policymaker Bill Dudley noted a solid case for a 50 bps rate cut.
A surge in rate cut bets continued on Monday, putting pressure on the dollar. However, the outlook remains uncertain as the probability of a 25 bps cut is also high. Therefore, Thursday’s outcome could catch some people off guard, causing turmoil in the markets.
EUR/USD key events today
Market participants today are not looking forward to any high-impact events. Because of this, the couple could have a slow day.
EUR/USD technical outlook: Bulls eyeing 1.11151
On the technical side, the EUR/USD price rose to challenge its previous high. The bullish bias is strong as the price is well above the 30-SMA. At the same time, the RSI is trading near the overbought region. The trend reversed after the RSI made a bullish divergence with the price.
–Are you interested in learning more about Forex robots? Check out our detailed guide-
Bulls are now approaching key resistance at 1.1151. A break above this level would solidify the bullish bias and confirm a new uptrend. Moreover, it would pave the way for the price to revisit the critical resistance level of 1.1200.
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
